The explanatory note is a component of the annual financial statements. It contains information about the organization, its financial condition, comparability of data for the reporting period and previous years. The procedure for compiling a note is presented in our article.
The explanatory note reflects a brief description of the organization's activities, key performance indicators, factors that influenced financial results in the reporting year, current investment activities, as well as decisions based on the results of consideration of annual financial statements and distribution of net profit. The information reflected in the note is necessary to obtain a more complete and objective picture of the organization's activities for the reporting period and changes in its financial position (clause 19 Instructions on the procedure for compiling and submitting financial statements, approved Order of the Ministry of Finance of Russia dated July 22, 2003 No. 67n). The note should include those data that are not disclosed in the forms of annual financial statements. This document should report non-application of the rules accounting, if they do not allow to reliably reflect the value of the property and the financial results of the organization. Otherwise, non-use is considered as an evasion from their implementation and is recognized as a violation of the law (clause 4, article 13 of the Law of November 21, 1996 No. 129-FZ).
Public organizations (associations) that do not carry out entrepreneurial activity and having, in addition to the disposed property, turnovers for the sale of goods (works, services), have the right not to submit an explanatory note as part of the financial statements (clause 4 Instructions on the volume of accounting reporting forms, approved Order No. 67n).
The obligatory form of an explanatory note has not yet been established by the legislation of the Russian Federation. In this regard, organizations develop it on their own. The explanatory note may consist of thematic sections, however, these sections do not have to correspond to the sections of the reporting forms. This is not the only framework an organization can apply. Data can also be aggregated in other ways. In addition, information can be presented in any form: in the form of text, tables, diagrams.
The note reflects mandatory information and additional information. Mandatory data includes basic information about the organization, changes in accounting policies, performance indicators of the organization, information on discontinued activities, etc. Additional information is reflected in the explanatory note at the discretion of the organization. In our article, one of the options for compiling a note is proposed. In this example, the data is generated by sections.
Section 1. Information about the organization
This section should contain the following information about the organization: legal address; the average annual number of employees for the reporting period or as of the reporting date; names and positions of members of the executive and supervisory bodies of the organization. Here it is necessary to briefly describe the management structure. It is also worth noting what type this organization belongs to: main, dependent or subsidiary.
If the organization is a joint-stock company (JSC), then the note should reflect the number of issued and paid-in shares, the number of issued shares, but not paid or paid in part, the nominal value of shares owned by the JSC, as well as its subsidiaries and affiliates.
If the JSC has issued an additional issue of shares, then the purpose of the additional issue, the date and the main conditions of the issue must be indicated in the explanatory note. In addition, information on the number of additional ordinary and preferred shares and the amount of funds received from the placement of shares should be reflected.
Section 2. Key performance indicators of the organization
This section should reflect the indicators and factors that influenced the financial results of the organization. The explanatory note contains information about the availability (at the beginning and end of the reporting period) and the movement of intangible assets and fixed assets. The note discloses information (clause 32 PBU 6/01, clause 31 PBU 14/2000):
- useful life;
On methods of valuation of assets acquired under agreements that provide for the repayment of obligations in non-monetary means;
On real estate objects that are in the process of state registration.
The explanatory note reflects information on how to assess the material production stocks(MPZ) by their groups, on the consequences of changing these methods, on the size and movement of reserves for depreciation of valuables (clause 27 of PBU 5/01).
Also includes additional data related to the lease of fixed assets, financial investments, receivables and payables. In addition, changes in the authorized, reserve or additional capital are indicated (paragraph 27 of PBU 4/99).
In the explanations, it is necessary to note the presence at the beginning and end of the reporting period of reserves for future expenses and payments, valuation reserves, indicate sales volumes by type of activity, decipher production costs (distribution costs), non-operating income and expenses.
This section should also reflect information on issued and received collateral for obligations and payments, on events after the reporting date and contingent facts economic activity.
If there were extraordinary facts of economic activity in the organization, then they and their consequences should also be noted in the explanatory note.
The explanatory note to the financial statements should reflect the information (clause 33 PBU 15/01):
On the presence and change in the amount of debt on the main types of loans, credits;
On the amount, types, maturities of issued promissory notes and placed bonds;
On the maturity of the main types of loans, credits, other loan obligations;
On the amounts of expenses on loans and credits included in operating expenses and in the value of investment assets;
On the value of the weighted average rate of loans and credits (if applicable).
In case of non-fulfillment or incomplete fulfillment by the lender of the loan agreement and (or) the loan agreement, the borrowing organization shall provide information on the shortfall in the explanatory note (clause 4 PBU 15/01).
From paragraph 25 of PBU 18/02 it follows that the following are disclosed in the notes to the balance sheet and income statement:
Conditional expense (conditional income) for income tax;
Permanent and temporary differences that arose in the reporting period and resulted in the adjustment of contingent income tax expense (conditional income) in order to determine current tax on profit (current tax loss);
Permanent and temporary differences that arose in previous reporting periods, but resulted in the adjustment of the conditional expense (conditional income) for income tax of the reporting period;
The amounts of permanent tax liability, deferred tax asset and deferred tax liability;
Reasons for changes in applied tax rates compared to the previous reporting period;
The amounts of a deferred tax asset and a deferred tax liability written off to the profit and loss account in connection with the disposal of an asset item (sale, transfer free of charge or liquidation) or type of liability.
Section 3. Changes in Accounting Policies
This section of the explanatory note describes the main changes in the accounting policy of the organization for the next reporting year (clause 4, article 13 of Law No. 129-FZ). These are changes that can affect the financial situation, movement Money or financial performance of the organization. They are subject to separate disclosure in the financial statements. The note should disclose both changes in accounting policies for the reporting year and changes provided for in next year.
The explanatory notes to the Balance Sheet and Profit and Loss Statement should disclose information related to the accounting policy of the organization, which should provide users with data that should not be included in the forms themselves, but which are necessary for a correct assessment of the company's performance (paragraph 24 of PBU 4/ 99).
The explanatory note should disclose the essential methods of accounting (clauses 12, 15 PBU 1/98). These include:
Depreciation of fixed assets, intangible and other assets;
Estimates of inventories, goods, WIP and finished products;
Recognition of profit from the sale of products, goods, works, services
other.
The minimum information about changes should include: the reason for the change in accounting policy; assessing the impact of changes in monetary terms; an indication that the data of the periods preceding the reporting year included in the financial statements for the reporting year have been adjusted (paragraph 22 of PBU 1/98).
Section 4. Information about affiliates
Information about affiliates is included in the explanatory note as a separate section (clause 14 PBU 11/2000).
Tonote!
Affiliated persons are organizations and individuals capable of influencing the activities of legal entities and individuals in accordance with the legislation of the Russian Federation.
Information about affiliates is disclosed if:
The entity is controlled or significantly influenced by another entity or individual;
The entity controls or has significant influence over another entity;
An organization and another enterprise are controlled (directly or through third organizations) by the same legal or natural person (group of persons).
Information about affiliated persons in the financial statements includes data on transactions between the organization preparing the financial statements and the affiliated person. In this case, we mean the transfer of assets or liabilities. Such operations can be: the purchase and sale of goods (works, services), fixed assets, the lease and lease of property, the transfer of R&D results, the provision and receipt of guarantees and pledges, etc.
For each affiliated person, the explanatory note must reflect:
Information about the affiliated person;
The nature of the relationship with him;
Types of operations;
The volume of each operation;
Cost indicators for pending transactions at the end of the reporting period;
Methods for determining prices for each operation.
If an organization or an individual controls another organization or an organization is controlled by the same legal or natural person (group of persons), then the nature of the relationship between them is subject to description in the financial statements, regardless of whether there were transactions between them in the reporting period ( 13 PBU 11/2000).
Chapter5. Information about state aid
State assistance to an organization can be provided in the form of subventions, subsidies, budget loans (excluding tax credits, deferrals and installment plans for the payment of taxes and payments), as well as in the form of land plots, natural resources and other property.
In the explanatory notes to the financial statements of the organization, the following information must be indicated in relation to state aid:
The nature and amount of budgetary funds recognized in accounting in the reporting year;
Purpose and amount of budget loans;
The nature of other forms of government assistance from which the entity directly derives economic benefits;
Unfulfilled as of the reporting date the conditions for the provision of budgetary funds and related contingent liabilities and contingent assets.
Section 6. Segment Information
An organization preparing consolidated reports should be guided by RAS 12/2000 Segment information. A segment is a part of an organization's business activities. Reportable segments are the segments for which information is disclosed in the financial statements. The principles for classifying information as reportable segments are specified in paragraph 9 of PBU 12/2000.
There are two types of segments: operational and geographic. The allocation of information by operating segments means that several types of goods, works, services are included in a homogeneous group on similar grounds. Information on a geographical segment can be generated, for example, for a certain region or several regions of the Russian Federation. It can also be distinguished by the location of assets, sales markets.
Section 7. Information on discontinued operations
Information on discontinued operations should be disclosed in the following order (clause 11 of PBU 16/02):
1) description of discontinued activities: operating or geographical segment (part of a segment, set of segments) within which the termination of activities occurs;
2) the date of recognition of the activity as terminated: indicate the date or period in which the completion of the organization's activities is expected (if they are known or determinable);
3) the value of the firm's assets and liabilities at the time of disposal or redemption;
4) the amount of income and expenses, profits and losses received before taxation, income tax;
5) cash flow from discontinued operations.
In the explanatory note or in the profit and loss statement, as assets are retired or liabilities are paid off, the amount of profit (loss) associated with the disposal of these assets or the redemption of these liabilities, and income tax, is indicated before tax.
For those assets and liabilities for which the organization has entered into sale and purchase agreements, the note shall reflect:
The selling price of the asset (after deducting the estimated costs of disposal);
Timing of receipt of funds;
The amount of related assets and liabilities.
For provisions for discontinued operations, the organization discloses information in accordance with PBU 8/01 “Contingencies of business activities”. The provision is subject to review and adjustment as of the end of each reporting period from the recognition of activities as discontinued until the completion of the termination of operations.
In the note, the entity discloses information on the discontinued operations from the reporting year in which the activities are terminated until the reporting period when the termination program is actually completed or abandoned by the entity. In case of cancellation of the program for termination of activities, the amounts of reserves and losses from the decrease in the value of assets are subject to recovery (clause 20 of PBU 16/02). All information must be provided separately for each part of the discontinued activity (clause 21 PBU 16/02).
Information for prior periods provided after the business is declared discontinued must be adjusted to separate assets, liabilities, income, expenses and cash flows. This is necessary for comparability of reporting data with previous indicators (paragraph 22 of PBU 16/02).
Section 8 Additional Information
If necessary, the explanatory note should indicate the procedure for calculating analytical indicators (profitability, share of own working capital, etc.).
When assessing the financial condition for the short term, the note may provide indicators for assessing the satisfaction of the balance sheet structure (current liquidity, provision with own funds and the ability to restore (loss) solvency). This section should describe the current solvency (the availability of funds in bank accounts, in the organization's cash desk, losses, overdue receivables and payables, credits and loans not repaid on time, the completeness of the transfer of relevant taxes to the budget, paid (payable) penalties for non-fulfillment of obligations to the budget); assess the position of the organization in the securities market and the causes of the negative phenomena that took place.
When evaluating the financial position in the long term, the following are given: a description of the structure of sources of funds, the degree of dependence of the organization on external investors and creditors, etc. A description of the dynamics of investments over previous years and for the future is given with the determination of the effectiveness of these investments.
In addition, an assessment of the organization's business activity can be given, the criteria of which are: the breadth of product sales markets, including the availability of export supplies, the reputation of the organization, expressed, in particular, in the popularity of customers using the services of the organization, and other information; the degree of fulfillment of planned indicators, ensuring the specified rates of their growth (decrease); the level of efficiency in the use of the organization's resources. It is advisable to include in the explanatory note data on the dynamics of the most important economic and financial indicators of the organization's work over a number of years, descriptions of future investments, ongoing economic activities, environmental protection measures and other information of interest to potential users of financial statements.
Mandatory information discloses general information about the taxpayer, accounting policies and requirements contained in the accounting regulations.
The amount of information about the organization depends on the structure of the organization, its legal form and other factors. For example, for joint-stock companies in the explanatory note, in addition to the executive body, it is necessary to disclose the composition of the board of directors and the audit commission, reflect information on issued shares, etc. If there are branches, it is necessary to indicate their addresses and names, areas of activity.
In accordance with the requirements of regulatory enactments, accounting methods are subject to disclosure in the explanatory note, without knowledge of the procedure for applying which, a reliable assessment of a number of reporting indicators is impossible. At the same time, accounting methods are subject to reflection in the accounting policy of the organization and, probably, there is no point in duplicating the same information twice. However, if in the reporting period the accounting policy of the organization has changed compared to the previous year, then these changes must be described in the text of the explanatory note. Information about a change in accounting policy should include the reason for the change, an assessment of the consequences in monetary terms, and an indication that the relevant data from previous periods included in the financial statements for the reporting year have already been adjusted.
Almost all of the Russian PBUs have a special part dedicated to the disclosure of information in financial statements. The volume of information that these rules require to be reflected in the reporting is very large and therefore most of this information should be included in the explanatory note.
The explanatory note may contain the following additional information:
1) data on reporting indicators for more than 2 years of the organization's activities.
For each numerical indicator of the financial statements (except for the report compiled by the newly created organization for the first reporting period), data must be provided for at least two years - the reporting and the previous reporting ones.
Comparative information for each numerical indicator may not be included in the explanatory note, but directly in adopted by the organization reporting forms.
2) data on the adjustment of indicators for the previous period due to their incompatibility with the data of the reporting period. If the data for the period preceding the reporting period is incomparable with the data for the reporting period, the former are subject to adjustment. The fact of each significant adjustment must be disclosed together with an indication of the reasons that caused it. These reasons include: reorganization; acquisition or lease of an enterprise as a property complex.
When carrying out an additional issue of shares, a joint-stock company is obliged to disclose the following information in the explanatory note:
in connection with which additional ordinary shares were issued;
date of issue of additional ordinary shares;
· the main conditions for issuing additional ordinary shares;
the number of additional ordinary shares issued;
· the amount of funds received from the placement of additional shares (when shareholders exercise their rights to acquire additional ordinary shares with their partial payment).
CONCLUSION
As a result of studying the proposed topic, it was revealed that the explanatory note to the annual report is one of the most important elements, which, together with other forms of reporting, forms the annual financial statements. An explanatory note differs from other forms of reporting by the presence of additional indicators that are not even reflected in accounting.
This reporting form is compiled in order to provide users with relevant information about the actual financial and economic activities of the organization.
One of the main documents regulating the presence of an explanatory note in financial statements and content requirements is Federal Law No. 129-FZ “On Accounting”. It prescribes that an explanatory note in reporting is used by all organizations, except for organizations that do not carry out entrepreneurial activities. The structure and content of the explanatory note are not regulated by regulatory documents, so each organization draws it up in its own way. Individual elements and their content are regulated various provisions on accounting.
The main requirement for the explanatory note is the reflection of essential information about the organization; about her financial situation; comparability of data for reporting periods and previous periods; on valuation methods and material items of financial statements.
There are basic elements or indicators that are reflected in this form of reporting, they include the following information: about the organization and owners; about the accounting policy; on income and expenses; about affiliated persons; about events after the reporting date and conditional facts of economic activity; earnings per share, etc.
It is very important, when compiling an explanatory note, that it does not duplicate the information of other reporting forms, but discloses their content. An explanatory note is formed based on the characteristics of the activity, the possibility of presenting detailed information in it. The paper presents two ways to distinguish between information. When using the first option, the organization uses the reporting forms that are contained in the annex to the order of the Ministry of Finance of Russia No. 4n. The information included in the reporting forms is presented in a detailed form. In the second method, the organization uses reporting forms developed independently on the basis of the reporting tables proposed in the Order of the Ministry of Finance No. 4n.
In the process of researching the object of the course work, it was revealed that the explanatory note allows reporting users to avoid erroneous conclusions; evaluate the efficiency of asset use, profitability of activities; reflect the costs that must be incurred to ensure future cash flows; gives a description of the dynamics of investments for the future with a determination of the effectiveness of these investments, etc.
Thus, it is obvious that the explanatory note is a really important component of the financial statements, and therefore, when working on it, the accountant must take into account that this part of the reporting, which allows forming an opinion about the organization, the directions of its financial policy, the effectiveness of management decisions, should be as much as possible understandable to interested parties. Therefore, it is necessary to present in it as much as possible full information in a form that is easy to understand.
BIBLIOGRAPHY
2) Accounting regulation "Information on related parties" PBU 11/2008, as amended. dated April 29, 2008 N 48n.
3) Regulation on accounting "Information on discontinued operations", PBU 16/02 (as amended by Orders of the Ministry of Finance of the Russian Federation of September 18, 2006 N 116n, of November 8, 2010 N 144n)
4) Regulation on accounting “Contingent facts of economic activity”, PBU 8/01 as amended. Orders of the Ministry of Finance of the Russian Federation of September 18, 2006 N 116n, of December 20, 2007 N 144n)
5) Regulation on accounting "Accounting policy of the organization" RAS 1/2008 (as amended by the Orders of the Ministry of Finance of the Russian Federation of March 11, 2009 N 22n, of October 25, 2010 N 132n, of November 8, 2010 N 144n)
6) Regulation on accounting "Accounting for fixed assets" PBU 6/01 (as amended by the Orders of the Ministry of Finance of the Russian Federation of May 18, 2002 N 45n, of December 12, 2005 N 147n, of September 18, 2006 N 116n, of November 27, 2006 N 156n, dated 10/25/2010 N 132n, dated 12/24/2010 N 186n)
7) Regulation on accounting and financial reporting in the Russian Federation (approved by order of the Ministry of Finance of Russia dated July 29, 1998 No. 34n, as amended on December 30, 1999 No. 107n, dated March 24, 2000 No. 31n, dated September 18, 2006 116n, dated March 26, 2007 No. 26n, dated October 25, 2010 No. 132n, dated December 24, 2010 No. 186n);
8) Federal Law No. 129-FZ of November 21, 1996 (as amended on September 28, 2010) “On Accounting” (as amended and supplemented, effective from January 1, 2011).
9) Ageeva O.A. Requirements for the formation of reporting under IFRS / O.A. Ageeva // Accounting 2006. - No. 14. p.51-57
10) Badamshina A.L. Compiling an explanatory note: what is important not to miss // Accountant hotline. - 2010. - No. 2.
12) Klimenko G.A. The content of the explanatory note to the financial statements // Accounting. - 2006. - No. 3.
13) Larionov A.D., Karzaeva I.N., Nechitailo A.I. Accounting financial statements: textbook. Allowance / A.D. Larionov (and others), ed. HELL. Larionov. - M .: TK Velby, Prospekt Publishing House, 2006. - 208p.
14) Novodvorsky V.D. Accounting (financial) reporting. - M.: INFRA-M, 2003. - 464 p.
15) Patrov V.V. Explanatory note to the annual financial statements / V.V. Patrov, V.A. Bykov // Accounting. - 2009. - No. 3. p.5-14
16) Sotnikova L.V. Explanations to the balance sheet and income statement / L.V. Sotnikova // Accounting. - 2010. - No. 1. – p.5-12
17) Sotnikova L.V. Explanations to the balance sheet and income statement / L.V. Sotnikova // Accounting. - 2006. - No. 2. – p.5-14
18) Comparative analysis of the main requirements for accounting (financial) statements in IFRS and RAS // Audit. - 2005. No. 8. - p.14
19) Strekasheva M.V. Materiality of information in accounting reports / M.V. Strekasheva // Auditor sheets. 2008. - No. 4. – p.30-33
20) Suglobov A.E. The role of an explanatory note in improving the analyticity of an organization's accounting (financial) statements. Consultant Accountant. - 2009. - No. 7. – from 18-26
Federal Law No. 339-FZ of November 28, 2011 "On Accounting"
Regulation on accounting "Accounting statements of the organization" PBU 4/99 (approved by Order of the Ministry of Finance of the Russian Federation of July 6, 1999 N 43n, as amended by Orders of the Ministry of Finance of the Russian Federation of 18.09.2006 N 115n, of 08.11.2010 N 142n)
Federal Law No. 129-FZ of November 21, 1996 (as amended on September 28, 2010) "On Accounting" (as amended and dated January 1, 2011)
Accounting (financial) statements: Proc. allowance / Ed. prof. V.D. Novodvorsky. - M.: INFRA-M, 2003. - 464 p.
Regulations on accounting and financial reporting in the Russian Federation (approved by order of the Ministry of Finance of Russia dated July 29, 1998 No. 34n, as amended on December 30, 1999 No. 107n, dated March 24, 2000 No. 31n, dated September 18, 2006 116n, dated March 26, 2007 No. 26n, dated October 25, 2010 No. 132n, dated December 24, 2010 No. 186n)
Klimenko G.A. The content of the explanatory note to the financial statements // Accounting - 2006 - No. 3.
Regulation on accounting "Accounting statements of the organization" PBU 4/99 (approved by Order of the Ministry of Finance of the Russian Federation of July 6, 1999 N 43n, as amended by Orders of the Ministry of Finance of the Russian Federation of 18.09.2006 N 115n, of 08.11.2010 N 142n)
Regulation on accounting "Accounting policy of the organization" PBU 1/2008
Suglobov A.E. The role of an explanatory note in improving the analyticity of an organization's accounting (financial) statements. Consultant Accountant. - 2009. - No. 7. – from 18-26
Bukach E. Explanatory note as part of the reporting / E. Bukach // Economy and life. Accounting application. - 2006. - No. 3. – p.13-15
Order of the Ministry of Finance of the Russian Federation of July 2, 2002 N 66n "On Approval of the Regulation on Accounting" Information on Terminated Activities "(PBU 16/2002)
Sotnikova L.V. Explanations to the balance sheet and income statement / L.V. Sotnikova // Accounting. - 2006. - No. 2. – p.5-14
Larionov A.D., Karzaeva I.N., Nechitailo A.I. Accounting financial statements: textbook. Allowance / A.D. Larionov (and others), ed. HELL. Larionov. - M .: TK Velby, Prospekt Publishing House, 2006. - 208p.
Order of the Ministry of Finance of the Russian Federation of January 13, 2000 No. 5n (as amended on March 30, 2001) “On Approval of the Accounting Regulation “Information on Affiliates” (PBU 11/2000)
Regulation on accounting "Information on discontinued activities", PBU 16/02 (as amended by Orders of the Ministry of Finance of the Russian Federation of September 18, 2006 N 116n, of November 8, 2010 N 144n)
Bukach E. Explanatory note as part of the reporting / E. Bukach // Economy and life. Accounting application. - 2006. - No. 3. – p.13-15
Klimenko G.A. The content of the explanatory note to the financial statements // Accounting - 2006 - No. 3
Patrov V.V. Explanatory note to the annual financial statements / V.V. Patrov, V.A. Bykov // Accounting. - 2009. - No. 3. p.5-14
Section 1. Brief description of the legal entity and the main directions of its activities
In this section, it is necessary to reflect the following information: the name of the organization, its organizational and legal form, legal address, information about the founders, the amount of the authorized (share) capital indicated in the constituent documents, the average annual number of employees as of the reporting date, the composition (surnames and positions) of members of the executive and control bodies of the organization.
From this section, users of financial statements should clearly understand what relationships exist between companies, what is the size of the authorized capital of the organization itself.
In the same section of the explanatory note indicate: the location, name and direction of activity of the parent and (or) subsidiaries (dependent) organizations. At the same time, their current investment and financial activities are considered.
Section 2. Accounting policy of the organization
If the accounting policy of the organization is formed on the basis of generally accepted assumptions, then these assumptions may not be disclosed in the explanatory note (clause 13 PBU 1/98, clause 24 PBU 4/99). If other assumptions are applied, they shall be disclosed together with the reasons for their application. From this section, users should learn how accounting policies affect reporting figures.
Significant aspects of the entity's accounting policies are subject to disclosure, and both the policy for the reporting year and changes in policy for the following year are disclosed. Changes in accounting policies that have had or may have a significant impact on the financial position, cash flows or financial performance of the organization are disclosed separately in the explanatory note.
Section 3. Information about affiliates
In this section, the entity must provide information about transactions with affiliates. According to PBU 11/2000, legal entities and individuals that can affect the performance of the organization. This, as a rule, is the parent company, subsidiaries or affiliates, founders, shareholders, etc.
For each affiliate, at a minimum, the following information is disclosed:
§ the nature of the relationship with him (control or significant influence);
§ types of operations with it;
§ volume of transactions of each type (in absolute or relative terms);
§ cost indicators for operations not completed at the end of the reporting period;
§ used methods for determining prices for each type of transactions with it.
The list of affiliates, information about which is disclosed, is independently established by the organization preparing the financial statements, based on the content of the relationship between the organization and the affiliate, subject to the requirement of priority of content over form.
If an organization or an individual controls another organization, or an organization is controlled directly or through third organizations by the same legal or natural person (the same group of persons), then the nature of the relationship between them is subject to description, regardless of whether there were transactions between them.
Section 4. Main performance indicators and factors that influenced the financial results of the organization in the reporting year
When presenting the main performance indicators that characterize qualitative changes in the property and financial situation, if necessary, the accepted procedure for calculating analytical indicators (profitability, share of working capital, etc.) should be given.
On the basis of indicators of the satisfaction of the balance sheet structure (current liquidity, provision of own funds and the ability to restore (loss) solvency), an assessment of the financial condition of the organization in the short term can be given.
When characterizing solvency, attention should be paid to such indicators as the availability of funds in bank accounts, in the organization's cash desk, losses, overdue receivables and payables, credits and loans not repaid on time, the completeness of the transfer of relevant taxes to the budget, paid (payable ) penalties for non-fulfillment of obligations to the budget. You should also pay attention to the assessment of the organization's position in the securities market and the reasons for the negative phenomena that took place.
When assessing the financial position for the long term, a description of the structure of sources of funds, the degree of dependence of the organization on external investors and creditors, etc. is given. The dynamics of investments over previous years and in the future is also analyzed with the determination of their effectiveness.
The explanatory note can also provide an assessment of the organization's business activity, the criteria of which is the breadth of product sales markets, including the availability of export supplies; the reputation of the organization, expressed, in particular, in the popularity of customers using the services of the organization, and other information; the degree of fulfillment of planned indicators, ensuring the specified rates of their growth (decrease); the level of efficiency in the use of resources of the organization, etc.
It is advisable to include in the explanatory note data on the dynamics of the most important economic and financial indicators of the organization's work over a number of years, a description of future investments, ongoing economic activities and other information of interest to potential users of financial statements.
The text of the note should show what factors influenced the formation of the financial result of the organization in the reporting year, what decisions were made based on the results of consideration of the annual financial statements and how the net profit of the organization was distributed.
Section 5. Information on discontinued operations
This section contains information about which line of business is being terminated, what is the share of this line of work in the total volume of work, and what are the possible consequences of the termination of this line of activity for the organization. In accordance with PBU 16/02 "Information on discontinued operations", the organization discloses the following information on discontinued operations in its annual financial statements:
§ description of discontinued operations: operating or geographic segment (part of a segment, set of segments) within which (which) the termination of activities takes place; date of recognition of the activity as terminated; the date or period in which the termination of the entity's operations is expected to be completed, if known or determinable;
§ the value of the assets and liabilities of the organization, expected to be disposed of or redeemed as part of the termination of activities;
§ the amount of income, expenses, profit or loss before tax, as well as the amount of accrued income tax related to discontinued operations;
§ cash flow related to discontinued activities, in the context of current, investment and financial activities during the current reporting period.
For provisions for discontinued operations, the organization discloses information in accordance with the requirements of PBU 8/01 “Contingencies of business activity” starting from the reporting year in which the activity is recognized as being terminated until the reporting period when the termination of activities is completed.
When recognizing activities that are terminated after the end of the annual reporting period, but before signing the organization's annual financial statements, the statements must be clarified in terms of disclosing indicators for the period covered by these statements. The consequences of recognizing the activity as being terminated (the formation of provisions for discontinued activities, the decrease in the value of assets and the loss from the decrease in their value) in this case are reflected in accordance with PBU 7/98 “Events after the reporting date”.
The explanatory note also reflects the fact of cancellation of the termination program.
At the same time, the amounts of previously recognized reserves, as well as losses from a decrease in the value of assets, are subject to recovery.
Section 6. Events after the balance sheet date and contingent facts of economic activity
The requirements for the formation of this section of the explanatory note are regulated by PBU 7/98 “Events after the reporting date” and PBU 8/01 “Contingent facts of economic activity”.
An event after the reporting date is recognized as a fact of economic activity that has had or may have an impact on the financial condition, cash flow or performance of the organization and which took place between the reporting date and the date of signing the financial statements.
The information disclosed in this section includes short description event (conditional fact) and its evaluation. If it is impossible to evaluate the event, then in the explanatory note it is necessary to explain why this cannot be done.
A contingent fact of economic activity is recognized as the fact of economic activity that took place as of the reporting date, with respect to the consequences of which and the likelihood of their occurrence in the future, there is uncertainty.
The consequences of a conditional fact, determined as of the reporting date when preparing financial statements, may be contingent assets or contingent liabilities.
All significant contingent assets and liabilities are subject to reflection in the financial statements of the organization, regardless of whether they are favorable for the organization.
The explanatory note discloses information on contingent assets, contingent liabilities, as well as on reserves formed in connection with the consequences of a contingent fact.
Section 7. Data on key reporting indicators by types of activity and geographical sales markets
Users of the financial statements of diversified organizations or companies with a wide geography of sales markets are faced with the problem of assessing the impact that individual divisions have on the overall financial results of economic activity. For the purposes of analysis and forecasting, additional information is required in this case.
This section also provides information on the impact that individual subsidiaries and affiliates have on the overall financial performance of the organization. This section is present in the explanatory note of those organizations that have such companies and are required to compile consolidated financial statements. At the same time, RAS 12/2000 "Information on segments" is guided
This section includes:
§ information about the organization's activities in certain conditions and regions (about operational and geographical segments);
§ Criteria for selecting this information;
§ indicators characterizing the activities of the organization for each segment (revenue, expenses, etc.);
§ the methods used by the organization in disclosing this information.
Section 8. Interpretation of accounting forms and
explanations for them
The composition of the explanatory note should include transcripts and comments on individual forms of financial statements. At the same time, one should distinguish between explanations for the main (balance sheet, income statement) and other reporting forms (forms Nos. 3-6). The main requirements for disclosure of information as part of the explanations to the main forms of reporting are presented in Table 2.
table 2
Basic Disclosure Requirements
| Article of financial statements | Basis for disclosure | Recommended presentation of information in reporting |
| Composition of production costs (distribution costs) | clause 27 PBU 4/99 | |
| The composition of non-operating income and expenses | clause 27 PBU 4/99 | Notes to the income statement |
| Extraordinary facts of economic activity and their consequences | clause 27 PBU 4/99 | |
| Terminated Operations | clause 27 PBU 4/99 | Notes to the balance sheet and income statement |
| Expenses for ordinary activities | clause 22 PBU 10/99 | In terms of elements |
| Expenses equal to the amount of deductions in connection with the formation of reserves (forthcoming expenses, estimated reserves, etc.) | clause 22 PBU 10/99 | In the explanatory notes to the income statement |
| Change in the amount of expenses not related to the calculation of the cost of sold products, goods, works, services in the reporting year | clause 22 PBU 10/99 | In the explanatory notes to the income statement |
| Revenue received as a result of the performance of contracts providing for the fulfillment of obligations (payment) in non-monetary funds | clause 19 PBU 9/99 | In the explanatory notes to the income statement: The total number of organizations with which these contracts are carried out, indicating the organizations that account for the bulk of the revenue; The share of revenue received under the specified agreements with related organizations; Method for determining the cost of products (goods) transferred by the organization |
Transcriptions can be presented in the form of tables, additional calculations and textual explanations. An organization may limit itself to textual explanations only if at least one of the following conditions is met:
§ the components of the analyzed indicator are not significant;
§ it is impossible to break the reporting indicator into components.
In any case, the organization itself determines which indicators need to be deciphered and how to do it. It can disclose indicators in the same form in which they are given in the appendices to the financial statements.
Section 9. Information on environmental protection measures and state aid
This section of the explanatory note discloses information about the organization's expenses for environmental protection measures. Separately, the direction of financing of environmental protection measures, sources of financing, and the amount of expenses are indicated.
Requirements for the formation of information on state aid are regulated by PBU 13/2000 “Accounting for state aid”. The following information shall be disclosed in the explanatory note:
§ the nature and amount of budgetary funds recognized in accounting in the reporting year;
§ purpose and amount of budget credits;
As a rule, an explanatory note is drawn up for the annual report. But if it is necessary to disclose additional information to internal or external users, an explanatory note can also be drawn up for interim reporting.
The explanatory note should contain information about the data, the disclosure requirement of which is defined in clause 27 PBU 4/99, as well as in other accounting regulations. This refers to data that is not reflected in the forms of financial statements, including:
On changes in the accounting policy of the organization;
On inventories;
About fixed assets;
About the income and expenses of the organization;
About events after the reporting date;
On conditional facts of economic activity;
By affiliates;
By operating and geographic segments, etc.
Explanatory note to the annual financial statements should contain significant information about the organization, its financial position, comparability of data for the reporting and previous years, valuation methods and significant items of financial statements.
The explanatory note should include:
Brief description activities of the organization, i.e. key performance indicators, factors that influenced the financial results of the reporting period, as well as a decision based on the results of consideration of the annual financial statements and the distribution of the organization's net profit;
Analytical indicators characterizing the state, structure and efficiency of the use of fixed assets, intangible assets, financial investments, etc.; calculate the profitability of the organization;
Assessment of the financial condition of the organization in the short term in terms of financial stability and solvency of the organization;
Assessment of the financial condition for the long term in terms of indicators of the structure of sources of funds, the degree of dependence of the organization on external investors and creditors, to determine the effectiveness of investments, etc.;
Evaluation of the business activity of the organization.
The explanatory note should report on the facts of non-application of accounting rules in cases where they do not allow to reliably reflect the property status and financial results of the organization's activities with appropriate justification. Otherwise, non-application of accounting rules is considered as an evasion from their implementation and is recognized as a violation of the legislation of the Russian Federation on accounting.
In the explanatory note to the financial statements, the organization announces changes in its accounting policy for the next financial year.
This article Russian law complies with International Accounting Standard No. 1 “Presentation of Financial Statements” (IAS 1-97). It states that "financial statements should provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions." If the report lacks clarity and clarity, it is impossible to make responsible decisions and make judgments based on it. This should fully apply to the information contained in the Russian financial statements.
Standard No. 1 states that the financial statements must contain relevant figures for the previous period. This, of course, increases the analyticity of reports. “Comparative information must be disclosed for the prior period for all financial statement numbers. Comparative information should be included in overview and narrative information when it is relevant to an understanding of the financial statements for the current period.”
In order to draw the right conclusions and make the right decision, it is necessary to have not only reports for the current period, but also for past periods, which are not available to any user.
Send your good work in the knowledge base is simple. Use the form below
Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.
Ministry of Education and Science of the Russian Federation
Federal Agency for Education
State educational institution
higher professional education
IRKUTSK STATE TECHNICAL UNIVERSITY
INSTITUTE OF ECONOMICS
COURSE WORK
BY DISCIPLINE
ACCOUNTING (FINANCIAL) STATEMENTS
"Explanatory note - content
and the procedure for its preparation
Performed by student gr. Bzu-07
Kukhta Ekaterina Andreevna
Checked st. teacher
Barasheva Elena Viktorovna
Irkutsk, 2009
Introduction
Accounting statements are a set of data characterizing the results of the financial and economic activities of the enterprise for the reporting period, obtained from the data of accounting and other types of accounting. It is a means of enterprise management and at the same time a method of summarizing and presenting information about economic activity.
Reporting performs an important functional role in the system of economic information. It integrates information from all types of accounting and is presented in the form of tables that are convenient for the perception of information by business entities.
Methodologically and organizationally, reporting is an integral element of the entire accounting system and acts as the final stage of the accounting process, which determines the organic unity of the indicators formed in it with primary documentation and accounting registers.
The importance of this part of the financial statements lies in the fact that the explanatory note is an appendix to the annual financial statements, which should contain significant information about the organization, its financial position, comparability of data for the reporting and previous periods, valuation methods and significant articles of the financial statements and other information. This is - independent part financial statements and the completeness, quality, reliability and method of presentation of the information contained in it, depends on what conclusions the interested users of the financial statements will draw about the financial position, results and other factors of the organization's activities. In essence, the explanatory note summarizes the information contained in the organization's financial statements, explains and comments on it, and also supplements it with other necessary information that is not reflected in the financial statements of organizations. The explanatory note gives a summary conclusion (analysis, result) of the organization's activities for the reporting period and is of the greatest interest to managers, top management, investors, owners, and other interested users.
The purpose of this work is to study the explanatory note. To achieve this goal, it is necessary to solve the following tasks: disclose information about the purpose and composition of the explanatory note, as well as consider the sections of the explanatory note and disclose information about them.
1. The concept of an explanatory note
1.1 Purpose and composition explainedpositive note
International financial reporting standards do not regulate the structure of annexes to basic reporting in any way. In our country, there is a long tradition of citing application formats. The corresponding reporting forms are of an auxiliary nature in the sense that they allow you to expand the understanding of the company formed by the user after reading the balance sheet and income statement. These forms contain information of three types: firstly, these are data that are analytical transcripts of articles and indicators of the main reporting forms; secondly, these are data representing one of the basic indicators in a different context (for example, the division of accounts payable into normal and overdue); thirdly, these are data that carry additional information obtained either on the basis of accounting data through accounting procedures of an analytical nature or from non-accounting sources (for example, information about received and issued collateral). This information can be obtained from the explanatory note and the final part of the audit report.
In Western accounting and analytical practice, there is no such document as an explanatory note, more precisely, it is presented, in fact, by various analytical sections of the annual report and explanations for individual balance sheet and income statement items. Domestic regulations, for example, federal law"On Accounting", such a document is provided.
Thus, the explanatory note should contain significant information about the organization, its financial position, comparability of data for the reporting and previous years, valuation methods and significant items of financial statements. The explanatory note should provide users with additional data to form a complete picture of the financial position of the organization, the financial results of its activities and changes in its financial position.
The explanatory note contains the following main elements:
1. An indication in the explanatory note to the financial statements that it is formed on the basis of the accounting and reporting rules in force in the Russian Federation. Financial statements must be reliable and give a complete picture of the financial position of the organization, the financial results of its activities and changes in its financial position. The explanatory note to the financial statements should indicate that the financial statements are formed on the basis of the accounting and reporting rules in force in the Russian Federation, except when the organization made deviations from these rules when compiling the financial statements.
2. The explanatory note should reasonably report on the facts of non-application of accounting rules in cases where they do not allow to reliably reflect the property status and financial results of the organization. Otherwise, non-application of accounting rules is considered as an evasion from their implementation, and is recognized as a violation of the legislation of the Russian Federation on accounting. Thus, in the explanatory note to the financial statements, it is necessary to disclose all the facts of non-application of accounting rules.
3. An indication in the explanatory note of the existence of significant uncertainties regarding events and conditions that may give rise to significant doubts about the applicability of the going concern assumption. If, in preparing the financial statements, there is a significant uncertainty regarding events and conditions that may give rise to significant doubts about the applicability of the going concern assumption, then the organization must indicate in the explanatory note to the financial statements such uncertainty and unambiguously describe what it is connected with.
4. When preparing financial statements, the organization must adhere to the content and form adopted by it consistently from one reporting period to another. Changes in the accepted content and form of financial statements are allowed in exceptional cases, for example, when changing the type of activity.
5. The Law of the Russian Federation "On Accounting" states that the explanatory note to the annual financial statements must contain significant information on the comparability of data for the reporting period and the previous period. For each numerical indicator of financial statements, except for the report compiled for the first reporting period, data must be provided for at least two years - the reporting and the previous reporting ones. If the reporting data for the period preceding the reporting year are not comparable with the data for the reporting period, then the first of the named data is subject to adjustment. Each significant adjustment must be disclosed in an explanatory note, along with an indication of its reasons.
6. The organization must disclose in the explanatory note to the financial statements the accounting methods adopted in the formation of the accounting policy that significantly affect the assessment and decision-making by the interested users of the financial statements.
7. An adjustment to the financial statements caused by the consequences of a change in accounting policies should be disclosed in the explanatory note to the financial statements, together with an indication of the reasons for this adjustment.
8. Separate disclosure in the explanatory note to the financial statements of changes in accounting policies that have had or may have a significant impact on the financial position, cash flow or financial performance of the organization. Changes in accounting policies that have had or may have a significant impact on the financial position, cash flow or financial performance of the organization are subject to separate disclosure in the explanatory note to the financial statements. Information about them should at least include: the reason for the change in accounting policy; assessing the impact of changes in monetary terms; an indication that the corresponding data of the periods preceding the reporting year included in the financial statements for the reporting year have been adjusted.
9. A change in the accounting policy of an organization can be carried out in the following cases: changes in the legislation of the Russian Federation or regulations on accounting; development by the organization of new methods of accounting; significant change in business conditions. These changes in the accounting policy for the year following the reporting year are announced in the explanatory note to the financial statements.
10. Accounts receivable presented in balance sheet as long-term and expected to be redeemed in the reporting year, may be presented at the beginning of this reporting year as short-term. The fact of presenting accounts receivable, previously accounted for as long-term, as short-term must be disclosed in the explanatory note.
11. Accounts payable, presented in the balance sheet as long-term payable in the reporting year, may be presented at the beginning of this reporting year as short-term. The fact of presenting accounts payable, previously accounted for as long-term, as short-term must be disclosed in the explanatory note.
12. A commercial organization may not more than once a year revalue groups of homogeneous fixed assets at their current value by indexation or direct recalculation at documented market prices. Disclosure in the explanatory note of the fact of revaluation of fixed assets at the beginning of the reporting period allows explaining to users of financial statements the lack of identity between the lines of the balance sheet, which reflect fixed assets as of December 31 last year in the column “at the end of the reporting period”, and the balance sheet for the reporting year in the column "at the beginning of the reporting year", in which data on fixed assets will be presented taking into account the revaluation carried out at the beginning of the reporting year.
13. An event after the reporting date is defined as a fact of economic activity that has had or may have an impact on the financial condition, cash flow or performance of the organization and which took place between the reporting date and the date of signing the financial statements for the reporting period (AR 7/ 98 "Events after the reporting date", approved by the Order of the Ministry of Finance of the Russian Federation of November 25, 1998 No. 56n.).
14. A contingent asset is a consequence of a contingent fact that is very likely to increase the entity's economic benefits in the future. Information about contingent assets is disclosed in the explanatory note for the reporting period if there is a high (50 - 95%) or very high (95 - 100%) probability that the organization will receive them. Information about contingent assets disclosed in the explanatory note to the financial statements of the organization should not contain an indication of the degree of probability or the value of the assessment of the contingent asset PBU 8/01 “Contingent facts of economic activity”, approved by Order of the Ministry of Finance of the Russian Federation of November 28, 2001 No. 96n.
15. Contingent liabilities are such a consequence of a contingent fact, which in the future with a very high (95 - 100%) or high (50 - 95%) degree of probability can lead to a decrease in the economic benefits of the organization. Contingent liabilities include:
Type 1: an obligation of the organization that exists at the reporting date, in relation to the amount or period, the execution of which is uncertain;
Type 2: a possible obligation of the organization, the existence of which at the reporting date can be confirmed solely by the occurrence or non-occurrence of future events beyond the control of the organization.
Information on type 2 contingent liabilities is subject to disclosure in the explanatory note.
16. Affiliates are persons (legal entities and individuals) capable of influencing the activities of other entities (legal entities and individuals). Thus, affiliates exercising control or being controlled include parent companies and subsidiaries, as well as individuals owning a controlling stake or more than 20% of voting shares, but having the power to determine the decisions of the organization. Information about affiliates that should be reflected in the financial statements includes data on transactions between the organization and affiliates for the transfer of assets or liabilities. Information about transactions with affiliates is important for reporting users, as it allows them to assess the impact of these transactions on the financial position and financial results of the organization. This information is included in the explanatory note as a separate section. (PBU 11/2000 "Information on affiliates", approved by the Order of the Ministry of Finance of the Russian Federation dated January 13, 2000 No. 5n.).
17. In some cases, it is difficult for users of financial statements to evaluate the activities of an organization on the basis of financial statements without its special preparation; they need not only generalized, but also more detailed information. Changes that significantly affect the assessment and decision-making of users of information on reportable segments (the list of reportable segments, methods of distributing income and expenses between them), as well as the reasons for these changes and an assessment of their consequences in monetary terms, are subject to separate disclosure in the financial statements. (PBU 12/2000 "Information on segments", approved by the Order of the Ministry of Finance of the Russian Federation dated January 27, 2000 No. 11n.).
18. The financial statements of a joint-stock company shall reflect:
Basic profit (loss) per share, as well as the amount of basic profit (loss) and the weighted average number of ordinary shares used in the calculation;
Diluted earnings (loss) per share, as well as the amount of adjusted basic earnings (loss) and the weighted average number of ordinary shares used in its calculation.
An explanatory note to the financial statements should contain significant information about the organization, its financial position, valuation methods and material items of the financial statements. The explanatory note shall disclose the data of items for which the balance sheet and income statement reflect other assets, other creditors, debtors, other liabilities, certain types profit and loss, if material.
The explanatory note should indicate the accepted procedure for calculating analytical indicators (profitability, share of own working capital). It is also advisable to include data on the dynamics of the most important economic and financial indicators of the organization's work over a number of years, descriptions of future investments made by the organization.
1.2 Sections of the explanatory note
As a rule, the sections of the explanatory note correspond to the sections of the reporting forms: non-current, current and other assets; equity, liabilities and other liabilities, income and expenses of the organization in the context of ordinary activities, operating, non-operating and extraordinary; cash flow information.
Organizations can decide to include an appendix to the balance sheet (form No. 5), consisting of seven sections, in the reporting:
Movement of borrowed funds;
Accounts receivable and accounts payable;
depreciable property;
The movement of funds to finance long-term investments and financial investments;
Financial investments;
Expenses for ordinary activities;
Social indicators.
Section 1 “Movement of borrowed funds” shows the balances at the beginning of the period, receipt, repayment and balances of funds received as loans from both credit and other organizations, and individuals. Overdue debts are allocated in a separate line.
Section 2 "Accounts receivable and accounts payable" provides data on receivables recorded on settlement accounts, with the allocation of balances at the beginning of the reporting period, the emergence and repayment of liabilities and balances at the end of the reporting year. The state of receivables and payables has a direct impact on the solvency of the organization. This state is determined by the presence of overdue debt, including for a period of more than three months, as well as the availability of collateral for accounts payable, which is reflected in this section. For reference, it shows the movement of bills, and provides a list of debtor organizations that have a small debt.
Section 3 "Depreciable property" deciphers the composition of intangible assets, fixed assets and profitable investments in material values belonging to the organization, in the appropriate columns - balances at the beginning of the period, receipts, disposals and balances at the end of the period.
In subsection I “Intangible assets”, under the article “Rights to objects of intellectual (industrial) property”, the value of rights arising from copyright and other agreements on works of science, literature, art and objects of related rights, computer programs, databases, etc. is given, patents for inventions, industrial designs, trademarks and service marks or license agreements, etc. Under the article "Rights to use separate natural objects reflect the cost of rights to use land and natural resources. In the article "Organizational expenses" they show the amount of expenses associated with the formation of a legal entity, and in the article "Business reputation" - the acquired business reputation when buying an organization.
Subsection II "Fixed assets" provides data on the movement (inflow and disposal from all sources) and balances of fixed assets at the beginning and end of the period at the original (replacement) cost in accordance with the All-Russian Classifier of Fixed Assets (OKOF) for the following types:
Land plots and objects of nature management;
Structures;
Cars and equipment;
Vehicles;
Production, household inventory;
working cattle;
productive livestock;
Perennial plantings;
Other types of fixed assets.
In addition, the cost of production, i.e. used to generate income from ordinary activities, and non-production (not used in ordinary activities) fixed assets. From the data on the cost of production fixed assets, fixed assets leased, inactive, i.e. under conservation, pledged property. The information in this half of the section details the relevant data of the balance sheet item "Fixed assets".
Subsection III "Profitable Investments in Material Values" characterizes property for leasing and provision under a rental agreement.
Since in section 3 "Depreciable property" data on its movement are given at their original cost, information on the depreciation of intangible assets, fixed assets, profitable investments (if such data is given in this section) is indicated in the certificate to this section. The reference to section 3 also indicates data on the results of revaluation and other changes in the value of fixed assets.
Section 4 “Movement of funds for financing long-term investments and financial investments” shows the amount of own and borrowed funds and their use for capital and other long-term investments. For reference, the cost of the work in progress capital construction, as well as investments in subsidiaries and affiliates and securities, target investments in the reconstruction and development of production.
Section 5 "Financial investments" includes information on the composition of debt
term and short-term financial investments, which are shown in the balance sheet as long-term and short-term financial investments. Under the item “Shares and shares of other organizations” they reflect the amount of investments in shares of joint-stock companies, authorized (reserve) capital of other organizations, including subsidiaries and affiliates in the Russian Federation and abroad. The article "Bonds and other debt obligations" characterizes investments in government securities. Under the article “Granted loans”, the amount of loans provided to other organizations and individuals is given. Since, according to accounting data, the value of securities may not coincide with the market value, this section provides information on the market value of securities for reference.
Section 6 "Expenses for ordinary activities" provides information on the organization's expenses by cost elements:
material costs;
Labor costs;
Deductions for social needs;
Depreciation;
Other costs.
In section 7 "Social indicators" in the section of the unified social tax, contributions to the Fund are disclosed social insurance, Pension Fund, for compulsory health insurance, as well as contributions under contracts voluntary insurance pensions. The same section provides data on the average number of employees of the organization.
In addition to the main sections, the explanatory note to the financial statements should contain basic information about the organization and owners, disclosure of significant aggregated indicators and explanations that are mandatory for all organizations.
The explanatory note should contain the following information about the organization
lowerization and owners:
Legal address of the organization;
Main activities;
The average annual number of employees for the reporting period or the number of employees as of the reporting date;
The composition (surnames and positions) of the members of the executive and control bodies of the organization.
Deciphering significant aggregated indicators. When filling out the forms of financial statements, the accountant must decide whether the available data are sufficient to form a complete picture of the financial position of the organization, the financial results of its activities and changes in its financial position. If insufficient, then the corresponding additional indicators and explanations should be included in the explanatory note. The decision on the significance of the indicator (respectively, the need for its interpretation) is made on the basis of the following conditions:
Non-disclosure of the indicator may affect the economic decision of interested users, taken on the basis of reporting information (for example, the user of reporting information is a bank specialist who decides to issue a loan to an organization);
The indicator has a value in the amount, the ratio of which to the total result of the relevant data for the reporting year is at least 5%.
Explanations obligatory for all organizations. Such explanations include: information about transactions in foreign currency; information on non-monetary property of the organization; information about the income and expenses of the organization; segment information; information about events after the reporting date and contingent facts of economic activity; information about government assistance.
2. Information disclosureinexplanatory note
2.1 Information disclosureabout events after the reporting date, features of information disclosure by segmentnthere
Events after the balance sheet date occur between the balance sheet date and the date the financial statements are approved. These include all events that could affect the content of reporting information, the assessment of the financial condition of the organization, its cash flow, and financial performance. These events include:
Events confirming the economic conditions that existed at the reporting date in which the organization conducted its activities;
Events that testify to the economic conditions that arose after the reporting date in which the organization conducts its activities.
Events related to the first group actually occurred in the reporting year, but due to the lack or insufficiency of information or errors made, they were not assessed correctly or were not taken into account at all. The second group includes events that actually took place after the reporting date, but affect the financial and economic indicators so strongly that ignoring the monetary assessment of the consequences of these events can lead to false conclusions about the financial position and potential of the organization, and, consequently, to the adoption users of wrong management decisions.
Based on this difference, various ways of reflecting the events of both groups are established. Events, circumstances and revised estimates of events that took place in the reporting period require changes in the accounting entry. The final turns containing these entries will naturally affect the change in the content of the reporting forms.
If this event occurred later than the reporting date, then its inclusion in the reporting period would be contrary to the principle of temporal certainty, therefore, such an event is taken into account off-system, that is, without compiling accounting entries, but by entering the relevant information into the explanatory note to the annual financial statements.
The reporting date is the last day of the reporting period for which information is summarized for the preparation of financial statements.
Information about events after the reporting date should be reflected in the relevant section of the explanatory note to the financial statements.
The requirements for the formation of this section are governed by the accounting provisions "Events after the reporting date" (PBU 7/98).
When compiling an explanatory note, an accountant needs to solve three problems: highlight those events that fall into the category “events after the reporting date”; divide them into two groups that have a different order of reflection in accounting in accordance with PBU; generate account correspondence reflecting events after the reporting date in accounting, as well as the text of explanations for reporting - for events that are not systematically reflected.
Information on the availability and amount of guarantees issued by the organization, obligations arising from promissory notes accounted for by the organization, and other similar obligations assumed by the organization, as a rule, is disclosed in an explanatory note for the reporting period, regardless of the degree of likelihood of the consequences of such facts of economic activity.
AT last years in the practice and theory of accounting and reporting, great importance is attached to the problem of studying and building a system of segmental accounting and reporting for commercial organizations. To understand the content, subject-target aspect and significance of segment reporting in modern conditions, it is necessary to define the basic concepts of segment accounting and reporting, their essence and economic nature.
In relation to the economic sciences, the term "segment" and the word formations corresponding to it are used not only in the theory of accounting and reporting, but also in the theory of management and marketing.
The concept of a segment in accounting theory is associated with the emergence
external segment reporting. It is rather difficult to establish the date of occurrence of segment reporting (or reporting by segments). The concept of “segment reporting” was formed gradually, it was preceded by “reporting of diversified companies”, “reporting of transnational corporations”. Only those companies whose equity or debt securities are publicly traded or which are preparing to issue such securities should submit segment reporting. Financial analysts were interested in the emergence of this standard and segment reporting. Investment in various industries, expansion of the product range, work on the production and sale of products in various markets of many commercial companies did not allow investors and other analysts to track and evaluate the performance of the company according to aggregate financial statements. Therefore, segment reporting "was created in order to obtain information about the activities of a commercial enterprise in the economic environment in which these activities are carried out."
Thus, the concept of segment reporting in accounting theory is initially associated with the organization's presentation of external reporting on various areas, types and markets of its activities.
The presentation of such information, the rules for its formation and reflection in the financial statements of all commercial organizations of the Russian Federation, except for credit ones, are regulated by RAS 12/2000 “Information by Segments”, approved by Order of the Ministry of Finance of the Russian Federation of January 27, 2000 No. 11n. and presentation of information by segments in the financial statements of commercial organizations.
PBU 12/2000 is intended for commercial organizations when compiling consolidated financial statements in two cases: if the organization has subsidiaries and affiliates or if, in accordance with the constituent documents of associations legal entities(associations, unions) created on a voluntary basis, the organization is entrusted with the obligation to draw up consolidated financial statements.
Clause 5 of PBU 12/2000 defines information on three types of segments: operating, geographical and reporting segments.
Operating segments characterize the organization's activities by homogeneous types or a group of goods, production, works, services, differing in risk, level of profitability, other indicators from other goods, works, services of this organization.
When choosing reportable segments, it is necessary to keep in mind the users of financial statements: information on segments must be relevant, reliable and comparable over time.
Geographic segments characterize the organization's activities in a certain territorial entity - a state, a group of states, a region or a group of regions of Russia, which differ in risks and profitability from the organization's activities in other geographical areas.
Geographic segments should be identified at the location of the organization's assets or markets for goods and other results of activity (location of buyers of goods, customers and consumers of works, services).
A reportable segment is information on a separate operating or geographic segment that is subject to mandatory disclosure in the financial statements or consolidated financial statements.
Segment revenue represents that portion of an entity's revenue that can reasonably be attributed to it, as well as revenue directly derived from operations performed by that segment.
Segment expenses consist of those incurred directly in the course of a transaction related to segment activities and those portions of the entity's total expenses that can reasonably be allocated to segment data. Segment expenses do not include extraordinary expenses, losses on the sale of investments, interest paid, income tax payments.
profit, etc.
At the same time, RAS 12/2000 requires that the share of all reportable segments identified in the preparation of financial statements account for at least 75% of the organization's revenue.
When compiling financial statements, primary and secondary information is generated by segments, which is allocated based on the prevailing risks and the level of profitability. If information on operating segments is recognized as primary information, then information on geographical segments is recognized as secondary, and vice versa, if primary information is presented on geographical segments, then secondary information is on operational segments.
Primary information on segments is disclosed on the basis of the following indicators:
The total amount of revenue, including a division into revenue from sales to external customers and from transactions with other segments of the organization;
Financial result of reportable segments;
The total carrying amount of reportable segment liabilities;
The total amount of capital investments in fixed assets and intangible assets of the segments;
The total amount of depreciation charges for fixed assets and intangible assets used by segments;
Aggregate share in net profit (loss) of affiliates and subsidiaries of the segments, as well as from joint activities;
The total amount of investments in dependent and subsidiaries, as well as in joint activities.
Secondary segment information is disclosed in an abbreviated form. For operating and geographic segments, the required disclosure rates are not the same. So, for secondary operating segments, information on the following indicators is required:
The amount of capital investments in fixed assets and intangible assets.
PBU 12/2000 establishes the rules for the formation and presentation of information on individual segments as part of the financial statements, which allows interested users of reporting information to better assess the organization's activities, development prospects, the degree of risk and the possibility of making a profit.
2.2 Disclosure of key indicators by activity and geographic marketandabout affandqualified persons
The requirements for the section on the most important indicators by type of activity and geographical markets in the explanatory note are regulated by the Accounting Regulation "Information by Segments" (PBU 12/2000). This section should provide interested users with information that allows them to better assess the organization's performance, prospects for its development, exposure to risks and profit.
By highlighting the relevant analytics, information about segment revenue (income), segment expenses, segment financial results, segment assets and liabilities can be obtained.
Segment revenue (income) - revenue from the sale of certain goods or from the sale of goods in a certain geographic region (data on its value directly related to this segment), as well as the part of the organization's total revenue that reasonably falls on this segment. Revenue is estimated on the basis of the prices actually applied by the organization, the pricing bases are subject to disclosure in the reporting - in the explanatory note.
Segment costs are the distribution costs of selling certain products or the costs of selling products in a specific geographic area, as well as the portion of the entity's total expenses that reasonably fall on that segment. They do not include income tax, emergency and part of operating expenses.
Financial result - the difference between revenue (income) and expenses of the segment.
Segment assets are assets that are used to trade in certain commodities or to trade in a particular geographic area. For example, the property of a branch will be attributed to the assets of the segment in which the branch is located.
Segment liabilities are liabilities that arise from the sale of certain goods or from the sale of goods in a certain geographic area (other than income tax liabilities). For example, these will be both the obligations of a retail outlet (branch), and all obligations under transactions for the sale of wholesale consignments of goods in the same region.
The purpose of segmentation is to determine the list of reportable segments and build analytical accounting in such a way as to obtain the value of the above indicators for each segment with a sufficient degree of reliability and with the lowest labor costs for accounting personnel.
A reportable segment is commonly understood as a separate reportable segment, information on which is subject to mandatory disclosure in the financial statements. The list of reportable segments is established by the organization independently. Dedicated reportable segments must account for at least 75% of the organization's revenue. If this value is less than 75%, then additional segments are allocated. A reportable segment allocated in the period preceding the reporting period must be allocated in the reporting period, regardless of whether it satisfies the criteria for distinguishing a reportable segment in the reporting period. Otherwise, comparability of financial statements data will be lost.
An operational or geographic segment is recognized as a reportable segment if a significant amount of its revenue is received from sales to external customers (not part of financial group constituting the consolidated financial statements) and at least one of the following conditions is met:
Revenue from sales to external customers and from transactions with other segments of the entity is at least 10% of the total revenue (external or internal) of all segments;
The financial result of the activity of this segment (profit or loss) is at least 10% of the total profit or total loss of all segments;
The assets of this segment account for at least 10% of the total assets of all segments.
The information provided by segments is divided into primary and secondary. As part of the primary information on the reporting segment in the financial statements, the following indicators related to the reporting segment are disclosed:
Total revenue, including revenue from sales to external customers and transactions with other segments;
Financial result (profit or loss);
The total balance sheet value of assets;
The total amount of liabilities;
The total amount of capital investments in fixed assets and intangible assets;
The total amount of depreciation charges for fixed assets and intangible assets;
Aggregate share in the net profit (loss) of dependent and subsidiaries, joint activities, as well as the amount of investments in these dependent companies and joint activities.
If the risks and profits of the organization are determined mainly by differences in products, then the primary disclosure is recognized by operating segments, and the secondary - by geographical segments, if the differences are in the geographical regions of activity, then disclosure by geographical segments is recognized as primary, and secondary - by operating segments. If risks and rewards are determined equally by differences in products and geographic regions, then information on operating segments is considered primary, and information on geographic segments is secondary. If the structure of the organization, as well as the internal reporting system, is not based on either goods or geographical areas, then the allocation of primary and secondary information to reportable segments is based on the decision of the head of the organization.
If information on operating segments is recognized as primary, then secondary information for each geographical segment is represented by the following indicators:
The amount of revenue from sales to external buyers by geographic regions allocated by the location of sales markets - for each geographical segment, revenue from sales to external buyers is at least 10% of the organization's total revenue from sales to external buyers;
The balance sheet value of the assets of the reporting segment by location of assets - for each geographical segment, the value of whose assets is at least 10% of the value of the assets of all geographical segments;
The amount of capital investments in fixed assets and intangible assets by location of assets - for each geographical segment, the value of whose assets is at least 10% of the value of assets of all geographical segments.
If information on geographical segments is recognized as primary, secondary information for each operating segment, the proceeds from the sale to external buyers of which is at least 10% of the value of the assets of all operating segments, is disclosed in the financial statements as follows:
Revenue from sales to external buyers;
Balance value of assets;
The amount of capital investments in fixed assets and intangible assets.
Affiliates are understood as legal entities and individuals capable of influencing the activities of an organization providing financial statements (PBU 11/2000 “Information on affiliates”, approved by Order of the Ministry of Finance of the Russian Federation dated January 13, 2000 No. 5n.).
The financial statements disclose information about affiliates when the reporting entity:
Has a significant impact on another organization;
Is under significant influence or control of another entity or individual.
General features characterizing affiliates are shown in Table. one.
Table 1
General features characterizing affiliates
|
Are affiliated |
Are not affiliated |
|
|
An entity that directly or indirectly controls another entity, is under the control of another entity, or is in a relationship of mutual control |
Organizations representing financial resources (credits, loans, financing). |
|
|
Associated organizations |
Unions |
|
|
Individuals who directly or indirectly own such blocks of shares that allow them to exercise significant influence over the organization, blessed relatives |
Organizations where the director is the same person, if it is likely that he cannot influence the policy of these organizations in their mutual operations |
|
|
Directors, senior officers and key management personnel of the organization; their next of kin |
Government departments and agencies, utility services and municipal authorities. |
|
|
Entities in which significant voting shares are held by directors, senior management, key shareholders or persons over whom they may exercise significant influence |
Individual suppliers and buyers, agents and intermediaries, even for large transactions that create conditions for a certain economic dependence |
The list of affiliates, information about which is disclosed in the notes to the financial statements, is determined by each organization independently.
Considering certain parties, information about them is considered as affiliates, regardless of whether any transactions were carried out between them or not.
It is not required to disclose information about affiliates in accordance with RAS 11/2000 in the following circumstances:
In the consolidated financial statements in relation to transactions within the consolidated group of organizations;
In the financial statements of parent organizations, when they are published together with the consolidated statements of the entire consolidated group;
In the financial statements of a wholly-owned subsidiary of the parent organization (100% of voting shares), if the latter is registered in the same country and provides consolidated financial statements.
Transactions between affiliates should be disclosed with a description of their characteristics and constituent elements.
An approximate list of transactions requiring disclosure of information on affiliates is given in Table. 2.
table 2
List of transactions with affiliates requiring disclosure
Information about affiliated persons as applied to financial statements must be presented clearly and completely. Users of financial statements should understand the nature of the relationship and the content of transactions with affiliates.
The following information is disclosed about the above transactions with each affiliated person:
The nature of the relationship - control, influence;
Types of operations performed;
The volume of transactions of each type, preferably in absolute and relative terms;
The value of the consequences arising from transactions that are not completed by the end of the reporting period;
Pricing methods used for each type of transaction or for each individual transaction (if applicable).
PBU 11/2000 "Information on affiliates" emphasizes that the above amount of information is minimal and can be expanded if the reporter considers it insufficient for interested users.
Conclusion
In this work, information was disclosed on the purpose and composition of the explanatory note, as well as sections of the explanatory note were considered and information about them was disclosed.
An explanatory note is the same independent part of the financial statements as the rest of its forms. The content of the explanatory note is primarily charming information, the disclosure of which is provided for by the Regulations on Accounting and Accounting in the Russian Federation, the Regulations on Accounting (PBU) and orders of the Ministry of Finance of Russia. In addition, it may include information that clarifies, supplements the information presented in other forms of financial statements.
The federal law "On Accounting" states that an explanatory note is included in the financial statements of an organization (with the exception of budgetary and public organizations). Submission of an explanatory note is mandatory.
An explanatory note is for the chief accountant of almost any organization the most time-consuming part of the preparation of financial statements. How it is compiled determines whether its users will be able to get a complete picture of the financial position and performance of the organization.
AT normative documents on accounting, only general requirements for its preparation are given, and that is why the accountant needs reliable and adequate information that would help him step by step to carry out this difficult work.
The explanatory note allows you to disclose not only the value of the indicators, but also the qualitative characteristics of the organization's activities for the reporting period ( average headcount employees, capital intensity and material intensity of production, staff turnover, growth and growth indices and other indicators of economic, statistical and other reports, the reasons for the current situation, prospects for its change, etc.). In the explanatory note, you can reveal the emerging trends, decipher the aggregated indicators, indicate the relationship of any characteristics. That is why the explanatory note becomes the basis of the report of the chief accountant or financial director at the annual meeting of shareholders.
The explanatory note should contain essential information about the organization, its financial position, comparability of data for the reporting and previous years, valuation methods and significant items of financial statements. The explanatory note should provide users with additional data to form a complete picture of the financial position of the organization, the financial results of its activities and changes in its financial position.
Bibliography
1. 22 accounting regulations. - M.: Eksmo, 2008. - 240 p. - (Accountant's portfolio)
2. Astakhov V.P. Accounting theory - M.: ICC "MarT"; Rostov n / a: Publishing Center "Mart", 2004. 512p.
3. Babaev Yu.A. [and etc.]. Accounting: textbook. - M.: TK Velby, Prospekt Publishing House. 2007. - 392 p.
4. Rich I.N. Khakhonova N.N. Accounting - Rostov n/a; "Phoenix", 2003. 608 p.
5. Boyko E.A., Shumilin P.E. Accounting (financial) reporting for university students - Rostov n / D .: Phoenix, 2005. - 218 p.
6. Accounting: Proc. Benefit. - 5th ed. revised and additional - M.: INFRA-M, 717 p. - (Higher education).
7. Accounting. - Publishing and Trade Corporation "Dashkov and K", 2008. - 416 p.
8. Zakharyin V.R. Accounting theory - M.: INFRA-M: FORUM, 2003. 304 p.
9. Kamyshanov P.I., Kamyshanov A.P. Accounting (financial) statements: compilation and analysis - M.: Omega-L, 2005. 208 p.
10. Klimova M.A. Accounting - M.: Berator-Press, 2003. 384 p.
Similar Documents
The purpose and composition of the information disclosed in the explanatory note. The main sections of the explanatory note, its significance for users. Disclosure of accounting indicators in the explanatory note of JSC "Ural Heavy Engineering Plant" for 2011.
course work, added 12/28/2012
Characteristics, methodology for compiling and main sections of the explanatory note. Accounting policy, information about reporting, decoding of its individual indicators, information about affiliates. Information disclosure requirements in the explanatory note.
term paper, added 04/19/2011
term paper, added 05/18/2012
The role of the explanatory note in financial statements, its structure and content. Analysis of the explanatory note of OAO AK "Yakutskenergo", the method of its compilation. Disclosure of the main accounting indicators of the explanatory note to the annual financial report.
term paper, added 05/23/2013
Features of the preparation and significance of the explanatory note to the annual financial report. Appointment of explanations to the financial statements. Events after the reporting date and conditional facts of economic activity, reflected in the explanatory note.
term paper, added 09/17/2010
Studying the role of an explanatory note in financial statements. Accounting reporting: principles of its construction and structure. Regulatory support for the formation of information in the explanatory note. Composition, structure and content of the explanatory note.
term paper, added 12/03/2013
Requirements for the preparation of an explanatory note. The procedure for compiling reporting forms and features of reporting. Drawing up an explanatory note to the annual financial statements on the example of OAO SZ Lotos. Elements of the accounting policy of the enterprise.
term paper, added 08/12/2009
The purpose and composition of the information disclosed in the explanatory note to the annual financial report, the requirements for disclosure of accounting data in it. Content this document, features of its compilation at OJSC "Ural Heavy Engineering Plant".
term paper, added 12/27/2012
Composition of financial statements. Sources of information needed for financial analysis. Technique for compiling an explanatory note. Methods of using accounting information by participants in market relations in the decision-making process.
term paper, added 05/09/2013
Economic characteristics of the enterprise. Organization of financial accounting in FSUE "Kalininskoye". The procedure for compiling an explanatory note to the annual financial statements. Formation of the values of indicators reflected in the reporting forms in the net assessment.
