Often, at the bottom of a company financial statement, you’ll see a line that reads: “The accompanying notes are an integral part of these financial statements.” Financial bookkeeping notes can clarify, explain, or even expand upon the information in financial reports. By clarifying information in plain English, these notes follow GAAP financial accounting standards which state that readability is a primary consideration in the preparation of company financial statements.
A Note About Financial Bookkeeping Notes
What can financial bookkeeping notes tell those reading your company financial statements? Notes may:
- Explain the financial accounting standards and principles applied in the preparation of the statements
- Describe the processes bookkeepers used to arrive at the figures in the statements
- Provide disclosures not published in the actual financial statements
- Help make financial statements more readable and understandable even across international borders
Some additional information notes may disclose include:
- Explanations behind debt
- Greater context for the company’s overall financial situation
- “Going concern,” which is the likelihood of a company to stay in business
- The likelihood of whether or not certain predicted liabilities (such as those related to a lawsuit) recorded will actually be incurred. These “contingent liabilities” are typically ranked in the notes as “known,” “reasonably estimable,” or “not reasonably estimable.”
Financial Bookkeeping Notes for International Interests
If your company is seeking international investors or does a lot of business abroad, your company financial statement notes may also include information designed to make it easier for foreign investors and vendors to read your financial statements.
Some of the items contained in your notes may include:
- An explanation of specific tax regulations
- Inflation accounting explanations
- Summary of GAAP financial accounting standards
Your financial bookkeeping records from AccountingDepartment.com will include all relevant notes that may be necessary for your company’s situation. Call us, and we’ll help you sort it all out and fill all your bookkeeping needs.
