Including Adequate Disclosures in Your Financial Report - dummies

Including Adequate Disclosures in Your Financial Report

A financial report needs to include disclosures of important financial information about the business, as well as financial statements. The term disclosures usually refers to additional information provided in a financial report.

You must make sure that your business financial statements have been prepared according to generally accepted accounting principles (GAAP) in the United States — or to international accounting standards, as the case may be — and that the financial report provides adequate disclosure.

Many smaller businesses hire an independent CPA to advise them on their financial reports.

Here’s a quick survey of disclosures in financial reports:

  • Footnotes: Provide additional information about the basic figures included in the financial statements. Virtually all financial statements need footnotes to provide additional information for several of the account balances.

  • Supplementary financial schedules and tables: These supplementary materials to the financial statements provide more details than can be included in the body of financial statements.

  • Miscellaneous information: You can present a wide variety of other information, some of which federal regulations may require. Other information is voluntary and not strictly required legally or according to GAAP.