MATERIALITY PRINCIPLE Definition

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MATERIALITY PRINCIPLE requires accountants to use generally accepted accounting principles except when to do so would be expensive or difficult, and where it makes no real difference if the rules are ignored. If a rule is temporarily ignored, the net income of the company must not be significantly affected, nor should the readers ability to judge the financial statements be impaired.

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RAN see REVENUE ANTICIPATION NOTE.

DISCLOSURE is to reveal information. Financial statement footnotes are one way of providing necessary disclosures.

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