The conceptual framework for financial reporting identifies the qualitative characteristics and foundational principles that make accounting information useful.

For the following situation, indicate:

(a) the name of the foundational principle; and

(b) whether the company is complying with the foundational principle and how you know that this is the case.

Situation:

On June 30, 2021, Alberta Oil Company guaranteed a large loan made by a local bank to one of Alberta Oil's largest customers.This guarantee was not included in the notes to Alberta's financial statements for the year ended August 31, 2021.