The Conceptual Framework

SECTION A According to the IASB's Conceptual Framework for Financial Reporting, which of the following statements regarding the qualitative characteristics of useful financial information is correct?

**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?

**Section A** ByteFlow, a rapidly growing tech startup, has recently developed a proprietary algorithm. The directors wish to capitalize the entire $500,000 spent on the project to boost the statement of financial position, arguing that this provides the most 'relevant' information to potential venture capitalists. However, $200,000 of this was spent on early-stage research before technical feasibility was established. According to the IASB's Conceptual Framework, which fundamental qualitative characteristic is primarily compromised if ByteFlow capitalizes the entire $500,000?