Source : Webster's Revised Unabridged Dictionary (1913)

Understatement \Un"der*state`ment\, n.
   The act of understating, or the condition of being
   understated; that which is understated; a statement below the
   truth.

Source : WordNet®

understatement
     n : a statement that is restrained in ironic contrast to what
         might have been said [ant: {exaggeration}]