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Types of Financial Statement Footnotes Detail on financial investments ? stipulates the fair value and unrealized losses and unrealized gains on investments, also any hedging activity. Detail on financial liabilities ? provides insight into the maturity of debt, repayment profile and interest rates on each debt issue.

Notes to financial statements most likely include: a discussion of significant trends, events, and uncertainties that affect the operating results.

What Are 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.

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.

Footnotes information can generally be split into two different areas. The first deals with the accounting methods a company chooses to formulate its financial information, such as revenue recognition policies. The second provides an expanded explanation of important company operational and financial results.

Full disclosure principle. The full disclosure principle requires that financial statements include disclosure of such information. Footnotes supplement financial statements to convey this information and to describe the policies the company uses to record and report business transactions.

Contingent liabilities require a credit to the accrued liability account and a debit to an expense account. Once the obligation is realized, the balance sheet's liability account is debited and the cash account is credited. Also, an entry is made in the associated expense of the income statement.