4.6 Notes to Financial Statements
18.104.22.168 Notes to financial statements are intended to communicate information necessary for a fair presentation of financial position and results of operations that is not readily apparent from, or cannot be included in, the financial statements themselves. The notes are an integral part of the financial statements and should supplement them. Therefore, separate notes should be prepared for each fiscal year presented. The note templates are designed to illustrate the disclosures required for cash basis local governments, as applicable. The notes must reflect the local government’s accounting policies and must include disclosure in the areas listed as they relate to the government’s financial position.
22.214.171.124 Notes to the financial statements should be prepared by reviewing and compiling templates provided in the manual that are needed for readers to understand the financial statements:
- Example notes presented in the manual are considered the minimum requirement for disclosure, as applicable. Since the basis of accounting is a basis other than GAAP, disclosures required for fair presentation include a description of the basis of accounting, how it differs from GAAP and disclosures similar to those required by GAAP for any elements presented in the financial statements that are similar to GAAP (e.g., example deposits and investments, property taxes, etc.). Additional disclosures not specifically shown as examples may also be required to achieve fair presentation for unique facts and circumstances.
126.96.36.199 The notes to financial statements can be presented in any format (i.e., narratives, tables, schedules, matrixes, etc.) as long as they contain the required information. Note disclosures should be expressed as clearly and simply as possible and include explanations as necessary to ensure it is understandable by users. However, this does not mean that disclosures should avoid precise technical terms or omit or abridge information that may be complicated or difficult to understand.
188.8.131.52 The notes should be immediately presented after the financial statements.
184.108.40.206 Example notes in BARS Manual consist of Sample Text and Instructions to Preparer.
Sample Text – example of common or standard language meant to help write the note. Sample text should be modified, deleted or added to as necessary to fairly present the government’s circumstances. While sample text is given, it is the local government responsibility to determine accuracy and adequacy of the disclosure.
Instructions to Preparer – comments and instructions on how to write the note, including required elements or additional versions of the note not shown in the sample text.
220.127.116.11 Notes should not include irrelevant, obsolete, trivial or superfluous information. For example, governments should refrain from negative disclosure (stating that a potential disclosure is inapplicable, such as there were no subsequent events requiring disclosure).