The Collaborative International Dictionary of English v.0.48:

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.
   [1913 Webster]

WordNet (r) 3.0 (2006):

understatement
    n 1: a statement that is restrained in ironic contrast to what
         might have been said [ant: exaggeration, magnification,
         overstatement]