Full Disclosure Principle in Accounting

TABLE OF CONTENTS

Authorities on Full Disclosure Principle 3
Full Disclosure Principle in an Annual Report 4
The Financial Statements. 4
Notes to Financial Statements. 5
Management’s Discussion and Analysis. 6
Business Overview. 6
Financial Condition and Liquidity. 6
Results of Operations. 6
Market Risk Management. 7
Advantages and Disadvantages of the Principle 7
Advantages. 7
Disadvantages. 8
REFERENCE LIST 9

The Full Disclosure Principle in Accounting
The full disclosure principle in Accounting is one among the generally accepted accounting principles or GAAP. This principle requires that users of financial statements must be able to have access to information pertaining to situations, circumstances, and events of a company that will be useful in their decision-making. Thus, through the full disclosure principle, information on the financial statements will be relevant and reliable and helps users in coming up with informed economic decisions (Wilkinson, 2013).
Authorities on Full Disclosure Principle
The Financial Accounting Standards Board or FASB, which is the organization responsible for establishing financial accounting and reporting standards that guide both public and private companies and not-for-profit organizations in applying GAAP (Financial Accounting Standards Board, 2018), has authority over the implementation of the principle of full disclosure. FASB derives its authority from the recognition by the Securities and Exchange Commission as the accounting standard setter for U.S. public companies. FASB exercises its authority through the standards it establishes and develops.
Another authority on the principle of full disclosure as it applies to financial statements is the Securities and

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