The disclosure principle requires that management prepare financial reports that disclose all of the following types of information except:

Question

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The disclosure principle requires that management disclose relevant information that is useful for decision making and facilitates comparison with other companies' financial reports. However, the principle does not require management to prepare forecasts of expected future earnings to help investors decide whether to invest in the company. This type of information is considered forward-looking and uncertain, and companies are not required to disclose it under the disclosure principle.

The Disclosure Principle Requires That Management Prepare Financial Reports That