Adequate Disclosure Principle requires that if there is a material misstatement, proper disclosure should be made. What does this principle emphasize?

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Adequate Disclosure Principle centers on presenting complete, transparent information so users can understand the true financial picture. When there is a material misstatement, it requires proper disclosure so the statements remain informative and not misleading. Disclosures aren’t optional—if something material is misstated, its nature, amount, and impact on the financial position, performance, and cash flows should be explained in the notes or other accompanying disclosures. This also covers changes in accounting policies or estimates and corrections of prior errors. The aim is to ensure users aren’t surprised by hidden facts and can assess the entity's true financial reality.