What is predictive value? Question content area bottom Part 1 A. Predictive value allows financial statement users to identify and understand similarities and differences among several entities. Accounting standards often allow alternative methods, such as straight-line or accelerated depreciation, and requires estimates, like the useful lives of long-lived assets. A company uses predictive values in its financial information so that financial statement users can compare it with similar information from another company, companies in its industry, or to its prior year. B. Information has predictive value if decision makers can use it as an input into processes that help forecast future outcomes. For example, companies report sales revenue each year. Financial statement users may use the prior year's revenues to predict future revenues. C. The concept of predictive value determines the relevance of information. The predictability of an item can depend on its size or nature. The conceptual framework does not specify a quantitative threshold for the predictability of an item nor does it identify the specific nature of items that would be considered predictable. D. Information has predictive value if it provides feedback about prior evaluations. For example, financial statement users will often compare reported net income to prior