Question:

Matrix Technologies designs and installs computer software for businesses. Recently, it learned that one of its major customers, representing 20% of annual sales, is in financial difficulty and is unlikely to be ordering for some time.

Matrix is about to issue its quarterly report to shareholders. Do you think the information about the customer should be disclosed in the quarterly report?

Support your answer by referring to the qualitative characteristics

Instructions:

The qualitative characteristics include:

relevance has the ability to make a difference in the decision-making process.

faithful representation is complete, neutral, and free from error.

comparability tells users of the information that businesses utilize similar accounting practices.

verifiability means that others are able to confirm that the information faithfully represents the economic activities of the business.

timeliness is available to decision-makers in time to be useful.

understandability is clear and concise.

How do these relate to the Matrix Technologies? What should they do based on this?