Question

State with reasons whether the following statement is true or false:
Financial statement must disclose all the relevant and reliable information in accordance with the full disclosure principle.

Answer 1

The principle of full disclosure requires that all material and relevant facts concerning financial performance of an enterprise must be fully and completely disclosed in the financial statements and their accompanying footnotes.

This is to enable the users to make correct assessment about the profitability and financial soundness of the enterprise and help them to take informed decisions.

Hence, the above statement is true.