25-5RQ
Question
When is nonfinancial information relevant?
Step-by-Step Solution
Verified Answer
The non-financial information is considered relevant when managers are required to make qualitative decisions associated with the business.
1Meaning of Information
In general terms, information refers to the data which is organized and structured. Such data can be financial and non-financial or may be associated with the technical information of a business concern.
2Relevancy of non-financial information
If expected future data differs among the alternatives, in such a case, non-financial information is relevant. Also, when non-financial information plays an important role in drafting quantitative and qualitative decisions and impacts the potential decision of the managers, it becomes relevant.