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When companies file their annual financial statements, they often add footnotes beneath the statement. Footnotes to the financial statements refer to extra information that a company supplies about its finances when filing a financial statement.

Any information that is needed to clarify or add additional detail to a financial statement will be found in the footnotes. Examples can include unexpected changes from the previous year, required disclosures, adjusted figures, accounting policy, etc.

Notes to the accounts are the additional information and explanations that accompany the financial statements. They provide more details and clarity about the items, amounts, and transactions reported in the balance sheet, income statement, statement of changes in equity, and cash flow statement.

To search for a footnote, follow these steps: Press Ctrl+F to display the Find tab of the Find and Replace dialog box. (See Figure 1.) In the Find What box, enter the text for which you want to search. To search for a footnote mark, enter ^f. ... Set other searching parameters, as desired. Click on Find Next.

The exact nature of these footnotes varies, depending upon the accounting framework used to construct the financial statements (such as GAAP or IFRS). Footnotes are an integral part of the financial statements, so you must issue them to users along with the financial statements.

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.

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.