Final answer:
The statement is true; items that materially affect the comparability of financial statements need to be disclosed in the footnotes to ensure transparency and informed decision-making.
Step-by-step explanation:
The statement is true. Items that materially affect the comparability of financial statements do generally require disclosure in the footnotes. This ensures transparency and provides a clear understanding of the financial position and performance of a company. Disclosures in financial reporting are critical for a wide range of users including investors, creditors, and regulators, as they enable the users to make informed decisions.
Material events or transactions such as changes in accounting policies, corrections of errors from previous periods, or significant acquisitions and divestitures can significantly alter the financial statements. The comparability of financial reports could be compromised without proper disclosure, preventing users from performing accurate trend analyses or making fair comparisons between different reporting periods or with other entities.
The footnotes are an integral part of the financial statements. They provide detailed information behind the numbers presented in the main statements - balance sheet, income statement, and cash flow statement. For example, if a company changes its method of inventory valuation from FIFO (First-In, First-Out) to LIFO (Last-In, First-Out), this change should be clearly stated in the footnotes, because it has significant effects on the reported earnings and the inventory values on the balance sheet.