The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Question

Quizplus · Accepted Answer

This statement accurately describes the cost-benefit constraint, which is a principle of financial reporting that requires companies to weigh the potential benefits of disclosing information against the costs of providing it. Only information that has benefits that outweigh the costs should be disclosed.

The Cost-Benefit Constraint Prescribes That Only Information with Benefits of Disclosure