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Footnotes to the financial statements refer to additional information that helps explain how a company arrived at its financial statement figures.They also help to explain any irregularities or perceived inconsistencies in year to year account methodologies.

Although footnotes are a required part of any financial statement, there are no standards for clarity or conciseness. Management is required to disclose information "beyond the legal minimum" to avoid the risk of being sued. Where this minimum lies, however, is based on management's subjective judgment.

If a business has hired an auditor to conduct an audit of its financial statements, that person will conduct just as thorough an investigation of the footnotes as of the financial statements, and will base his or her opinion of the financial statements partially on the information contained within the footnotes.

Pick up any financial report and you'll always find references to the footnotes of the financial statements. The footnotes describe in detail the practices and reporting policies of the company's accounting methods and disclose additional information that can't be shown in the statements themselves.

A financial statement disclosure will communicate relevant information not captured in the statement itself to a company's stakeholders. The disclosures can be required by generally accepted accounting principles or voluntary per management decisions.

Assignments footnotes are essential as well as helpful to support the claim done in the text of the document. It can be used in highlighting the subject matter of your paper. 4). Basically, these are used to add more explanation of the sources that you've used.

The notes to the financial statements are a required, integral part of a company's external financial statements. They are required since not all relevant financial information can be communicated through the amounts shown (or not shown) on the face of the financial statements.