Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company's financial statements, but is useful to informed readers, is required in order to meet the concept of
A) Understandability.
B) Reliability.
C) Representational faithfulness.
D) Cost/benefit.

Question

Quizplus · Accepted Answer

Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company's financial statements, but is useful to informed readers, is required in order to meet the concept of Understandability. The purpose of financial statements is to provide useful information to users. Informed readers may find the additional information useful, even if it does not meet the requirements for presentation in the financial statements.

Footnote Disclosure That Summarizes Information That Does Not Meet the Measurement