F2 - M1 - Notes in the Financial Statements

Question 1

Summary of Significant Accounting Policies

Answer 1

GAAP and IFRS, integral part of F/S, 1st or 2nd (sometimes background is first note, location, product description, etc) note to F/S

Question 2

Compliance with IFRS

Answer 2

IFRS requires statement of compliance with IFRS

Question 3

Disclosures

Answer 3

Measurement basis for F/S

Accounting principles and methods used in period
 Basis of consolidation
 Depreciation methods
 Amortization of intangibles
 Inventory pricing
 Use of estimates
 Fiscal year definition
 Special revenue recognition (long term construction contracts, franchising, lease agreements
 Criteria for investments are cash equivalents

Question 4

Remaining Notes in F/S

Answer 4

Relevant info to decision makers
•	Material info inventory, PPE, other assets / liabilities
•	Changes in stockholders equity
•	Marketable securities disclosure
•	FV estimates
•	Contingency losses / gains
•	Contractual obligations (NP / BP)
•	Pension plans
•	Segment reporting
•	Subsequent events
•	Changes in accounting principles

Question 5

Disclosure of Risks and Uncertainties

Answer 5

Nature of Operations (half of companies have this 1st)
• Major products or services, markets with locations

Use of Estimates in F/S
• General statement mentioning GAAP

Certain Significant Estimates
• If estimate will change in the future, near term,

Current Vulnerability Due to Certain Concentrations
• Customer, supplier, lender, grantor or contributor
• Revenue from particular products, services or fund raising
• Available supply of resources, materials, labor or services
• Market or geographic area