What must information have in order to be considered useful?

For information to be considered useful in the context of accounting and financial reporting, it must possess qualitative characteristics. These characteristics include relevance, reliability, comparability, and consistency.

Relevance ensures that the information can influence decision-making by providing insights into the economic conditions and performance of an entity. Reliability ensures that the information is accurate, verifiable, and faithfully represents what it purports to show. Comparability allows users to analyze and compare financial statements across different time periods or entities, while consistency helps in making those comparisons easier by applying the same accounting principles over time.

While quantitative measurement, material adjustments, and timely reporting can enhance the usefulness of information, they alone do not ensure that the information is useful in a broader context. Qualitative characteristics are the foundational traits that make information valuable to users, such as investors and creditors, who need to make informed decisions based on the data presented. This understanding is crucial in the field of accounting, as it underpins the purpose of financial reporting itself.