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understandability


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The accounting principle that the financial information provided by a company should be such that its significance is capable of being perceived by a person with a reasonable knowledge of business and accounting and a willingness to study it with reasonable diligence. The information should not leave out anything material, but should not be so comprehensive that the main points of significance are obscured. The concept is defined in the Accounting Standards Board's Statement of Principles and in Financial Reporting Standard 18, Accounting Policies.

Subjects: Financial Institutions and Services — Accounting.


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