Wondering what is disclosure? This term refers to a statement that reveals relevant or useful information about a company or business. It is issued by a company for the public in general or specifically for its investors.
The disclosure definition as per Cambridge Dictionary is ‘the act of making something known or the fact that is made known’. Usually used concerning equity investment, a disclosure helps investors better decide whether to buy/sell a company’s shares. A company could also have a financial disclosure to explain the events or decisions that have had a huge impact on its financial performance.
Consider this disclosure example: An advisory firm publishes a report on the kinds of mutual fund schemes that are the most profitable to invest in. They may have the following as a disclosure: “Our report estimates profitability based on forecasts and limited factors at our disposal. Investors should not use it as the only or foremost basis of choosing an investment.”