Disclosure definition
/What is a Disclosure?
A disclosure is additional information attached to an entity's financial statements, usually as explanation for activities which have significantly influenced the entity's financial results. These disclosures are typically a mix of quantitative and qualitative information, and are mandated by the applicable accounting framework (such as GAAP or IFRS).
Investors like to review these disclosures in detail, to find clues about the underlying financial condition of a business.
FAQs
What is the Difference Between Recognition and Disclosure?
Recognition involves recording an item in the financial statements, such as including revenue or an asset on the balance sheet or income statement. Disclosure, on the other hand, provides additional information in the footnotes without including the item in the primary financial statements. While recognition affects the financial totals, disclosure enhances transparency without altering reported figures.