Statement of Financial Accounting Concepts No.1

I used CON.1 from the following website (http://www.fasb.org/pdf/con1.pdf)

CON.1: Objectives of Financial Reporting by Business Enterprises
What are the objectives?
Objective 1:Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions. The information should be comprehensible to those who have a reasonable understanding of business and economic activities and are willing to study the information with reasonable diligence.
Meaning: Provide useful information to the stakeholders. The information must be understandable and be reasonable as its extent.
Objective 2:Financial reporting should provide information to help present and potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective cash receipts from dividends or interest and the proceeds from the sale, redemption, or maturity of securities or loans. Since investors' and creditors' cash flows are related to enterprise cash flows, financial reporting should provide information to help investors, creditors, and others assess the amounts, timing, and uncertainty of prospective net cash inflows to the related enterprise.
Meaning: Investors and creditors make decision according to the financial reporting information. Therefore, it is important that the financial reporting information provide proper value amounts.
Objective 3:Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources (obligations of the enterprise to transfer resources to other entities and owners' equity), and the effects of transactions, events, and circumstances that change its resources and claims to those resources.
Meaning: Financial reporting should provide the capital structure of the company or other significant transactions occurred.

Primary purpose of providing financial reports is to providing the company's performance result of the period and how management of the company fullfill responsibility to direct the company for its owners.

This concept is the fundamental of the financial reporting. Without this concept, all the financial reportings are useless. The company must provide the useful infromation for its stakeholders to make proper or better decisions.