Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 2 - Conceptual Framework for Financial Reporting - Exercises - Page 71: E2-3b

Answer

Materiality and Cost/benefit

Work Step by Step

Cost/benefit principle holds that the cost of obtaining information must not outweigh the benefit. The maturity concept, on the other hand, maintains that entities may disregard unimportant matters but must disclose other important ones in their financial reports.
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