Notes to the Financial Statements

Question 1

What is usually the first note to the financial statements and what should be included?

Answer 1

The summary of significant accounting policies is usually the first note after the financial statements and includes components such as: measurement basis, accounting principles and methods, and revenue recognition policies.

Question 2

When should significant estimates be disclosed ?

Answer 2

It should be disclosed when it is reasonable possible that the estimate with change in the near term and that the effect of the change will be material.

Question 3

When is the disclosure of vulnerability to concentration required ?

Answer 3

The criteria to satisfy this requirement is: (1) The concentration exists as of the financial statement date; (2) The concentration makes the entity vulnerable to the risk of a near-term severe impact; (3) It is at least reasonably possible that the events that could cause a severe impact from the vulnerability will occur in the near term.