Question 1

**Section A**

GlobalHealth NGO recently changed its accounting policy for valuing medical inventory from FIFO to Weighted Average to better align with its international donor reporting requirements. According to the IASB Conceptual Framework, which qualitative characteristic is primarily enhanced by this change if it allows donors to evaluate the NGO alongside similar global entities?

Accepted Answer

Recall the enhancing qualitative characteristics from the Conceptual Framework. When the goal is to evaluate an entity alongside 'similar global entities', the characteristic being applied is Comparability.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Students often confuse relevance (a fundamental characteristic) with comparability (an enhancing characteristic).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 2

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