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.