Question

Explain the convention of Materiality' giving examples. Does Materiality contradict Full Disclosure' ?​

Answer 1

Answer:

Full disclosure principle requires that all the facts necessary to ensure that financial statements are not misleading must be disclosed, whereas materiality principle requires those items and events that have insignificant economic effect or are not relevant for decision making need not be disclosed.

Answer 2

Answer:

Full disclosure principle requires that all the facts necessary to ensure that financial statements are not misleading must be disclosed, whereas materiality principle requires those items and events that have insignificant economic effect or are not relevant for decision making need not be disclosed