Notes to Financial

Statement
Notes to financial statements
Notes to FS presents:
• Description or disaggregation of items presented in
the face
• Information about items not qualified for
recognition
Purpose of notes to FS
• Present information about the basis of preparation
of the financial statements and the specific
accounting policies used.
• Disclose the information required by the PFRS
• Provide additional information not required by the
PFRS but is relevant to understand the FS
Order of presenting notes
1. Statement of compliance
2. Summary of significant accounting policies
3. Supporting information or computation for line
items in the face
4. Other disclosures
Related Parties
Related parties
Parties are related if one party has:
• The ability to control the other party
• The ability to exercise significant influence over the
other party
• Joint control over the entity
Examples of related parties
• Parent and subsidiaries
• Associates
• Venturers
• DOSRI
Events after the
reporting period
Events after the reporting
period…
• … are those events, whether favorable or
unfavorable, that occur between the end of
reporting period and the date on which financial
statements are authorized for issue
• Also known as subsequent events
• May require either adjustment or disclosure
Types of subsequent events
• Adjusting events
• Non-adjusting events
Adjusting events
• Settlement of case that confirms already present
obligation
• Bankruptcy of a customer
• Sale of inventory that confirms its NRV
• Determination of cost of assets bought or proceeds
of assets sold
• Determination of profit sharing and bonus
• Determination of tax liability
• Discovery of fraud or error
Non-adjusting events
• Business combination
• Plan of discontinuation of operations
• Major change in asset composition
• Major change in liability composition
• Major change in equity composition
• Announcement of major restructuring
• Abnormally large changes in prices
• Change tax rates