Adequate disclosure refers to meeting the minimum essential data disclosure requirements of various laws, such as gift tax return disclosures in tax law. brokers' fees in securities law, and other disclosuer requirements. In the corporate context, it is the concept that financial statements and their accompanying footnotes should contain all the pertinent data believed necessary to the reader's understanding of a business's financial status.
For example, under IRS rules, a gift is considered adequately disclosed if the gift tax return contains the following information:
- a description of the transferred property and any consideration received by the transferor;
- the transferor's identity and relationship of the transferor to the transferee;
- if a trust has been used in the gift, the trust's taxpayer identification number and a brief description of the terms of the trust or a copy of the trust;
- a detailed description of the valuation method or appraisal; and
- a disclosure of a position taken, if contrary to current interpretive regulations.