are the principles of materiality and full disclosure contradictory to each other

Dear Student,

Materiality Principle requires that all relative items, knowledge of which might influence the decision of users of financial statements should be disclosed in the financial statements. It would be wrong to say that it is contradictory to full disclosure but is treated as an exception to full disclosure principle.

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.



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