In the preparation of financial statements, full disclosure of minor events are ignored in line with
Answer Details
In the preparation of financial statements, minor events that have no significant impact on the financial position or performance of a company can be ignored in line with the materiality concept.
The materiality concept states that information is considered material if it would affect the decisions of an informed reader of the financial statements. In other words, information is considered material if it is important enough to impact the overall understanding of the financial statements.
Therefore, if an event is considered minor and unlikely to affect the financial statements in a significant way, it may not be disclosed in the financial statements. This helps to simplify the financial statements and focus on the information that is most relevant and important to users.