According to this concept, all material information should be disclosed in the financial statements. To enable the users of the financial statements to take informed economic decisions, it is necessary to disclose all the relevant information in the financial statements. No material information affecting the interest of general investors should remain undisclosed or concealed. Financial statements should be prepared honestly. According to section 129(1) of the Company Act, 2013, the financial statements shall give a true and fair view of the state of affairs of the company.

Examples :

• Based on full disclosure concept, whenever there is change in method of providing depreciation, the impact of such change on the profit or loss and in the value of asset should be disclosed in financial statements.
• Similarly, information about the change in method of stock or inventory valuation and its impact should be disclosed in financial statements.
• In addition to book value of investment in listed shares, the market value thereof is also shown as additional information in financial statement.
• The practice of appending notes or schedules to the financial statements has developed as a result of the principal of full disclosure, e.g., information about contingent liabilities, future plans, etc.