List and explain the enhancing qualitative characteristics of financial information according to the Ind AS. OR As a general principle, the entities…

(a) Either List of Enhancing Qualitative Characteristics of Financial Information The usefulness of financial information is enhanced if it carries following four characteristics: Comparability: Users' decisions involve choosing between alternatives. Consequently, information about a reporting entity is more useful if it can be compared with similar information about other entities and with similar information about the same entity for another period or another date. For information to be comparable, like things must look alike and different things must look different. Verifiability: Verifiability means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation. Verification can be direct or indirect. Direct verification means verifying an amount or other representation through direct observation. Indirect verification means checking the inputs to a model, formula or other technique and recalculating the outputs using the same methodology. Timeliness: Timeliness means having information available to decision-makers in time to be capable of influencing their decisions. Generally, the older the information is, the less useful it is. However, some information may continue to be timely long after the end of a reporting period because, for example, some users may need to identify and assess trends. Understandability: Classifying, characterising and presenting information clearly and concisely makes it understandable. Some phenomena are inherently complex and cannot be made easy to understand. Excluding information about those phenomena from financial reports might make the information in those financial reports easier to understand. However, those reports would be incomplete and therefore possibly misleading. Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information diligently. At times, even well-informed and diligent users may need to seek the aid of an adviser to understand information about complex economic phenomena. Or As a general principle, the entities should use the same measurement basis for initial recognition and subsequent measurement of an asset or a liability which creates two possible scenarios of "at-market” transactions and "off-market" transactions. Transactions on market terms (i.e. 'at-market' transactions') Transactions using currency (i.e. cash): At initial recognition, the cost of an asset acquired, or of a liability incurred is normally similar to its fair value at that date, unless transaction costs are significant. Therefore, whether historical cost or current value is used as a measurement basis subsequently, the same basis is also normally appropriate at initial recognition. Exchange of asset or liability When an entity acquires an asset, or incurs a liability, in exchange for transferring another asset or liability, the initial measure of the asset acquired, or the liability incurred, determines whether any income or expenses arise from the transaction which is recognised in statement of profit and loss as an income. The reverse will apply for a liability. If the asset acquired is subsequently measured at cost, no income or expenses arise at initial recognition since the asset acquired is initially measured at cost which is the fair value of the asset transferred i.e. given up, unless income or expenses arise from the derecognition of the transferred asset or liability, or unless the asset is impaired or the liability is onerous. Transactions not on market terms (i.e. ‘off-market' transactions) Assets may be acquired, or liabilities may be incurred, as a result of an event that is not a transaction on market terms. For example: (a) the transaction price may be affected by relationships between the parties; (b) an asset may be granted to the entity free of charge by a government or (c) an asset may be donated to the entity by another party; (d) a liability may be imposed by legislation or regulation; or (e) a liability to pay compensation or a penalty may arise from an act of wrongdoing. In such cases, measuring the asset acquired, or the liability incurred, at its historical cost may not provide a faithful representation of the entity's assets and liabilities and of any income or expenses arising from the transaction and other event. Hence, it may be appropriate to measure the asset acquired, or the liability incurred, at deemed cost. In some such cases, a current value of the asset or liability is used as a deemed cost on initial recognition and that deemed cost is then used as a starting point for subsequent measurement at historical cost. Any difference between that deemed cost and any consideration given or received would be recognised as income or expenses at initial recognition.