How does the disclosure principle help financial statements users compare the financial statements of retailers, with regard to inventories?

What will be an ideal response?

The disclosure principle holds that a company's financial statements should report enough information for outsiders to make informed decisions about the company. The company should report relevant and representationally faithful information about itself. This means properly disclosing inventory accounting methods, as well as the substance of all material transactions impacting the existence and proper valuation of inventory. It also requires the use of comparable methods for consistency of presentation from period to period. The financial statements typically contain a footnote describing the inventory pricing method used, as well as the fact that inventory was valued at the lower of that method or market.
The financial statements of retailers can be compared if they use the same inventory method. The disclosures reveal the inventory method used by each company so users can compare companies with the same inventory method.