2k NOTES TO FINANCIAL STATEMENTS The purpose of financial statements is to convey information to individuals interested in the financial situation of the organiza- tion. However, in most instances, the statements themselves are inadequate to provide complete information. Additional information is conveyed by appending notes to the financial statements. The purpose of these notes is to ensure full disclo- sure of all relevant information needed for the financial state- ments to constitute a fair representation of the financial posi- tion, results of operations, and cash flows of the organization in accordance with GAAP. Financial statements without notes may be inadequate for several reasons. In some cases, organizations are allowed a number of choices of how to record and report financial results (e.g., how to report inventory). Two identical hospitals with exactly the same inventory might report a different asset value