Full or adequate disclosure is an accounting concept which requires that information provided in financial accounting reports be sufficiently complete to avoid misleading users of the reports by omitting significant facts or information. The disclosure concept also refers to revealing information that would be useful in the decision-making processes of informed users. Full disclosure is required for the fair presentation of financial statements. Examples of items usually included in financial statements include accounting policies, depreciation and inventory methods, contingencies, related-party transactions, and lease and pension details.
The Accounting Principles Board in APB Statement No. 4 stated that fair presentation is met when a proper balance has been achieved between the conflicting needs to disclose important aspects of financial positions and results of operations in accordance with conventional aspects and to summarize the voluminous underlying data into a limited number of financial statement captions and supporting notes.
Many disclosures are made in the body of the financial statements and in notes (footnotes), schedules, and supplementary statements. Significant accounting policies are usually disclosed in the first note to the financial statements or in a summary of significant policies preceding the first note. Notes to the financial statements are considered an integral part of the statements.
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