DEFINITION of 'Adequate Disclosure'

The accounting concept confirming that all essential information is included in a financial statement. Adequate disclosure refers to the ability for financial statements, footnotes and/or supplemental schedules to provide a comprehensive and clear description of a company's financial position. Readers of a company's financial statements, including investors and creditors, should be able to ascertain the company's financial health by reviewing a financial statement with adequate disclosure.

BREAKING DOWN 'Adequate Disclosure'

Adequate disclosure in accounting practices mandates that all readers of a financial statement have access to pertinent data that would be deemed essential to understanding a company's financial position. Adequate disclosure requires that key facts are included within the financial statement to help investors and creditors adequately assess the financial situation of a particular company.

RELATED TERMS
  1. Footnotes To The Financial Statements

    Additional information provided in a company's financial statements. ...
  2. Disclosure

    The act of releasing all relevant information pertaining to a ...
  3. Financial Statement Analysis

    The process of reviewing and evaluating a company's financial ...
  4. Income Statement

    A financial statement that measures a company's financial performance ...
  5. Combined Statement

    Also known as a descriptive or consolidated statement, combined ...
  6. Account Statement

    A periodic summary of account activity with a beginning date ...
Related Articles
  1. Investing

    12 Things You Need To Know About Financial Statements

    Discover how to keep score of companies to increase your chances of choosing a winner.
  2. Investing

    Why Financial Statements Are Harder to Read Than Ever Before

    Understand four major reasons that financial statements published in 2016 are more complicated and difficult to read than they were in the past.
  3. Small Business

    Want To Know What Disclosures Mean ... In Plain English?

    Disclosures are the fine print in financial reports. We strip away the legal speak to tell you what they really mean.
  4. Investing

    Financial Footnotes: Start Reading The Fine Print

    Find out what could be hidden in this often-overlooked part of the financial statements.
  5. Investing

    Footnotes: Early Warning Signs For Investors

    These documents hold very important information, but reading them takes skill.
  6. Investing

    What are Financial Statements?

    Financial statements are a picture of a company’s financial health for a given period of time at a given point in time. The statements provide a collection of data about a company’s financial ...
  7. Investing

    What Would Full Disclosure Mean For The Market?

    In the wake accounting scandals, more people are calling for full disclosure. But what would that even help?
  8. Investing

    Explaining Financial Statement Analysis

    Financial statement analysis is the process of reviewing a company’s statements to gain an understanding of its financial health.
  9. Investing

    Footnotes To The Financial Statements

    The footnotes provide additional information in a company’s financial statements.
  10. Investing

    An Investor's Checklist To Financial Footnotes

    Footnotes to the financial statements contain very important information, but reading them takes skill.
RELATED FAQS
  1. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Answer >>
  2. How do marketable securities impact a company's financial statements?

    Understand how the various components of the financial statements are impacted by investments in marketable securities owned ... Read Answer >>
  3. Which financial accounting statement contains information on a company's net sales?

    Find out which accounting statement contains information on a company's net sales as well as other key statements analysts ... Read Answer >>
  4. How are the three major financial statements related to each other?

    Learn why investors analyze a company's financial statements, and how the income statement, balance sheet and cash flow statement ... Read Answer >>
  5. How do investors and lenders benefit from financial accounting?

    Read about the benefits of financial accounting, including access to information and transparency between companies and their ... Read Answer >>
  6. What does financial accounting focus on?

    Learn the main tenets of financial accounting, the guidelines by which it is governed and how outsiders use it to gauge a ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center