Adequate Disclosure

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.

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