One of the key characteristic of financial statement implies that the user of financial statement can compare the financial statements of an entity with the other enterprise's financial statement to analyze and evaluate their the performance and financial position and to identify trends in an entity's performance with reasonable convenience. 

Comparability simply the quality of a financial statement that enables anyone to compare financial statement with other financial statements of the same company or financial statement of other companies with the similar business


An investor can compare the balance sheet of a company with the balance sheet of other company 

A government agency can compare the year 2001 income statement of a firm with year 2002 income statement 

Tax agency can compare the year 2001 income statement of a company with the year 2002 income statement 

Important to note:

  • Financial statements should be so prepared that they disclose the financial policies of an enterprise to enable the user of financial statements to differentiate the accounting policies that will help making a valid comparison between the similar items in the account of different firms 
  • The enterprise should change the financial policies when they become inappropriate for the firm because the comparability is not the same as uniformity 
  • Corresponding information of upcoming financial periods should be disclosed to enable user of financial statements to make comparison over time