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Definition

The actual income statement and balance sheet - as opposed to the notes to those accounts. Certain information is always shown on the face of the accounts - like fixed assets or turnover - while other information like depreciation on those fixed assets is usually shown by way of a note to the accounts. For example, in its financials for the year to 31st August 2023, Clicks (CLS) showed the cost of the July 2021 civil unrest as R61,251m on the face of the income statement - and then said in a note to the accounts "The civil unrest in KwaZulu-Natal (KZN) in July 2021 impacted 52 Clicks stores and one The Body Shop store, as well as two of the group’s distribution centres. The group suffered significant physical damage and loss to its fixed assets, cash on hand and inventory in the affected stores and distribution centres. 339 Clicks stores and 26 The Body Shop stores were closed at the peak of the unrest to protect employees and customers, and to limit potential losses. By 31 August 2021, 34 of these stores had been reopened. A further 11 stores have since been reopened and currently eight stores remain closed. It is expected that a further three will be reopened by the end of the first half of the 2022 financial year and four in the second half". Then in the financials for the year to 31st August 2022 the income statement showed that the company had receieved R167m in compensation from their insurance. Finally, in the financials for next year to 31st August 2023 there was no income from insurance payouts. It is very important to read through the notes to the accounts in the financials to get a good understanding of the business. That R167m insurance payout had a 6,3% positive impact on the company's profit in the 2022 financial year. In 2023 the profit was down by 3,8% from the 2022 figure which shows how important the details in the note to the 2021 financial statements turned out to be.

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