Explanatory note: sections and content

An indispensable attribute of the financial statements is an explanatory note, which is compiled on various documents and has the main objective in more detail and in detail to disclose information explaining the accounting activities of the enterprise or organization. Its content and compulsory presentation are stipulated in paragraph 5 of PBU 4/99. As a rule, the content of the note includes some additional data: tables, graphs, diagrams that allow interested persons to most accurately and objectively evaluate the economic activities of an enterprise or organization.

According to the established practice, an explanatory note is not provided by small enterprises that are not obliged to perform compulsory audit of financial statements.

An explanatory note to the balance sheet that is submitted by a specific time should contain the following information, distributed among sections.

1. General information about the enterprise should contain information about:

- the organizational form of this legal entity and its name;

- actual and legal address;

- number of employees at the reporting date and their average annual number;

- name, structure and composition of managing and executive bodies;

- information about the founders of the company or organization;

- the amount of the authorized capital;

- availability of licenses, the time of their issuance;

- the amount of taxes paid;

- information about the auditor.

2. General characteristics of accounting policy. In this section, the explanatory note reflects accounting rules applied in this particular enterprise, as well as those changes that were made to it, indicating the reasons for these changes. In addition, all those results that resulted from the introduced changes to the accounting policy methodology are indicated.

3. Data on individual assets are reflected in the fixed assets of the enterprise, inventories, loans, financial investments and assets made in foreign currency.

In particular, such data are information on the initial value of the OS value and depreciation charges, on useful life, on the property of the enterprise owned by the ownership, on the methods of assessing the OS and the assets of the enterprise, on the movement of material assets, on the debts of the enterprise, on the amount of loans And the terms of their redemption, the value of securities and assets, and others.

4. Profit analysis Explanatory note reflects the activities of the enterprise or organization. For such an assessment, the coefficients that characterize the parameters of liquidity, profitability, financial performance, solvency are specially calculated. At the same time, an explanatory note to the annual report must necessarily contain data on the availability of financial assets in the cash register and on the accounts of the enterprise, the amount of losses incurred and their causes, bad loans repaid, information on penalties paid and other sanctions, analysis of the general financial situation of the organization or enterprise.

5. Information on the balance of the enterprise reflects in the note the volume of sales, the composition of production costs and their reserves, extraordinary cases of economic activity.

6. Explanations to specific items of accounting.

7. Evaluation of the overall business activity of the enterprise, which indicates the volume of markets, the reputation of the organization, the level of implementation of the forecast parameters for the development of the enterprise and the efficiency of resource use.

8. Data on changes in the amount of introductory remnants and their causes.

9. Information on subsidiaries and affiliates and organizations with a detailed description of the characteristics of their economic activities.

10. Conditional facts - litigation, in which the enterprise participated, warranty obligations, obligations.

11. Information on the status of joint activities: objectives, the amount of contributions to it, the types and number of contracts, the value of assets, the amount of profits, information on joint operations and assets.

12. Segment information is provided when an enterprise or organization has subsidiaries or affiliates or firms.

13. Information on events that occurred after the balance sheet date and analysis of the causes and consequences.

14. Data on state aid, if any. It indicates its purpose, nature and magnitude, terms of delivery and results of use.

15. Ecological indicators reflecting the magnitude of the impact of production activities on the environment.

16. Information provided by the JSC should include information on the number of all types of shares and data on their nominal value.

17. Information to be reported in accordance with PBU 18/02.

18. Information on discontinued operations.

19. Other data.

Correct and complete presentation of the data in the note serves not only as an important element of the accounting policy, but also as an effective tool for in-depth analysis of the enterprise's activities with a view to developing a strategy for its future development.