Ten Common Notes to the Financial Statements
In This Chapter
Brushing up on accounting policies and subsequent events
Measuring inventory and assets
Gauging intangibles and consolidations
Finding out about employee benefits and contingencies
This chapter walks you through the explanatory notes to the financial statements. Explanatory notes are discussions of items that accompany the financial statements, which are the income statement (covered in Chapter 5), the balance sheet (see Chapter 6), and the statement of cash flows (discussed in Chapter 7). These notes are important disclosures that further explain numbers on the financial statements. The reason for these notes harkens back to fulfilling the needs of the external users of the financial statements.
“External users of the financial statements” is just a fancy way of saying people like you or me who may be interested in investing in the business. Users may also be banks thinking about loaning ...