Question
Write short-note on: $(1)$ Full Disclousre Concept:
✓
Answer
According to this concept all material information should be disclosed in the financial statements. To enable the users of the financial statements to take informed economic decisions, it is necessary to disclose all the relevant information in the financial statements. No material information affecting the interest of general investors should remain undisclosed or conceald. Financial statements should be prepared honestly.According to section$-129(1)$ of the Companies Act, $2013,$ the financial statements shallgive a true and fair veiw of the state of affairs of the company or companies, comply with the accounting standards notified under section$-133$ and shall be in the forms as may be provided for different classes of companies in schedule III. All other disclosures as required the Companies Act shall be made in the notes to accounts in addition to the requirements set out in this schedule.
The financial statements has developed as a result of this principle of full disclosure.e.g. information about contingent liabilities, market value of certain investments, method of providing depreciation, method of valuation of stock and other accounting policies are disclosed in financial statements with a view to disclose significant or material information. All significant information should be disclosed irrespective of legal requirements to do so. Even when there is no legal requirement to disclose a particular information, material or significant information is to be disclosed.
The financial statements has developed as a result of this principle of full disclosure.e.g. information about contingent liabilities, market value of certain investments, method of providing depreciation, method of valuation of stock and other accounting policies are disclosed in financial statements with a view to disclose significant or material information. All significant information should be disclosed irrespective of legal requirements to do so. Even when there is no legal requirement to disclose a particular information, material or significant information is to be disclosed.
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