explanatory note to the balance sheet - a mandatory part of the financial statements.It is regulated by the provisions of paragraph 5, accounting № 4/99 «Accounting reporting of the organization."The document reveals details about the accounting policies necessary for a complete analysis of all the indicators of economic activity.
Absent an explanatory note to the balance sheet can only be in small enterprises or socially-oriented non-profit organizations, which are not mandatory audits.
The document contains:
• general information about the company;
• details of accounting policies;
• complete information on the assets and liabilities;
• balance sheet structure;
• assessment of the dynamics of profit;
• details of income and expenditure;
• assessment of business activity;
• Information on affiliates;
• information about events that occurred after the balance sheet, and much more.
explanatory note to the balance sheet includes information about the organization: full name of the legal entity, organizational and legal form, management structure, factual and legal address, the size of the share capital, the founders of these companies and the average number of employees.All these data are indicated at the beginning, and they are followed by an item on the accounting policies.This is a very important section, because without him this note is incomplete and does not meet the required format.It disclosed the accounting rules.If during the period they have been modified, it lists all the changes occurred and their causes.
The third part contains all the information on fixed assets, stocks of companies, as well as data on financial investments and loans.In the presence of the company that are denominated in foreign currency, they are also listed in this section.The fourth paragraph of the explanatory note includes the analysis and assessment of the balance sheet structure: liquidity ratio, solvency, profitability, etc.Next comes information that reflects all sources of income and expenses of the organization, including barter transactions.
According to the Russian Ministry of Finance number PP-10/2012, an explanatory note to the balance can be framed in a free form, because it is not an element of strict accounting and is designed for owners of the company.A sample of the explanatory note to the balance sheet can be found in the official annexes to a circular letter of the Ministry of Finance.This should not be confused with the official explanatory note to the balance sheet, which is performed in tabular form determined by the organization itself.The task of explanation - to decipher all the rows of financial statements.
Explanatory Note - example combined in one document information that demonstrates all the sides and aspects of business enterprise.The summary lists all the basic data.This document is equally useful for both the owners of the enterprise, as well as for current and potential investors.
