2.

From your analysis of the financial reports of the two companies, explain how the following
qualitative characteristics are evident in the reports:

- Pick ONE example of one of the ‘fundamental’ qualitative characteristics evident in the reports.

- Pick ONE example of any two ‘enhancing’ qualitative characteristics evident in the reports.

The quality demand for accounting information concerns creditors, investors and lenders; which
creates fundamental qualitative characteristics that are required in accounting information. There
are six qualitative characteristics of accounting information which is further divided into two
fundamental (primary) qualitative characteristics and enhancing (secondary) qualitative
characteristics. The fundamental characteristic includes representational faithfulness, also known
as reliability and relevance. And on the other hand enhancing qualitative characteristics includes
the other remaining four characteristics verifiability, timeliness, understandability, and
comparability.

RB Patel Group Limited and Fijian Holdings Limited both the companies are listed on the South
Pacific Stock Exchange. Hence both the companies are operated by the board of directors and
there qualitative characteristics of accounting information are inter relatable. One example of one
of the ‘fundamental’ qualitative characteristics evident in the reports of RB Patel Group Limited
and Fijian Holdings Limited is Relevance. That states how helpful the information is for
financial decision-making processes. Therefore, “accounting information is relevant if it can
provide helpful information about confirmatory value (past events) and predictive value help in
predicting future events or in taking action to deal with possible future events” [CITATION Cor19 \l
1033 ]. For instance both the company’s (RB Patel Group Limited and Fijian Holdings Limited)
financial statements show present-day (2019) and pass (2018) reports that is very useful in
relevant decision making.

One example of any two ‘enhancing’ qualitative characteristics evident in the reports of RB Patel
Group Limited and Fijian Holdings Limited are Comparability and Timeliness. For instance
“where necessary, amounts relating to prior years have been reclassified to facilitate comparison
and achieve consistency in disclosure with current year amounts” [CITATION RBP19 \l 1033 ] . RB
Patel Group Limited and Fijian Holdings Limited have used comparison method to compare
between 2019 and 2018 the previous year financial reports. Moreover both the company’s
reports were prepared on time, reflecting the qualitative characteristics of Timeliness. For
example, “if a company issues its financial statements a year after its accounting period, users of
financial statements would find it difficult to determine how well the company is doing in the
present”[ CITATION Cor19 \l 1033 ] but both the companies presented their reports on time in 2019.