Fundamental Characteristics of the IASB Conceptual Framework

You might remember the fundamental characteristics of useful financial information (per the IASB Conceptual Framework) are:

  • Relevance, and
  • Faithful Representation

and how there’s a little bit more around those two points you should know.

I came up with a quick and easy way to remember these fundamental characteristics of the IASB Conceptual Framework. Everytime I think the fundamental characteristics, I remember this fellow:

Really PC Farmer, standing at his FENCE

What on earth do I mean by that? Well, it’s a simple mnemonic for you to use when studying for the F7 Financial Reporting exam. Jot it down on a flashcard, on a post it note, or in the Conceptual Framework section of your F7 ACCA notes. Here’s what is stands for


Relevant information is capable of making a difference in the decisions made by users. Financial information is capable of making a difference in decisions if it has predictive value, confirmatory value, or both.

Predictive Value

Confirmatory Value

Faithful Representation

General purpose financial reports represent economic phenomena in words and numbers, otherwise it won’t be relevant. In order for it to be faithfully represented, it must be free from error, neutral and complete.

Free from Error




Hopefully this is of some use to you. If you have any tips or techniques that you use, please contact us and let us know.