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Definition

These form part of the annual financial statements of a company. They supply more information on the figures contained in the financial accounts, according to the requirements of the Companies Act. It is very important to consider these notes carefully before buying the shares of the company. They often contain important information, which the company has preferred to show as a note rather than in the balance sheet, income statement, statement in changes in equity or cash flow statements. For example, any change in accounting policies is usually contained in the first note, and these can be very important to the final profit or loss picture. Other items that are covered are a breakdown of investments into listed and unlisted entities, directors' emoluments, a breakdown of fixed assets, auditors' fees, details of borrowings and so on.

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