Sample explanatory note to the balance sheet. Sample explanatory note to the annual financial statements

In accordance with paragraph 1 of Article 13 of Law No. 129-FZ “On Accounting”, organizations are required to prepare financial statements based on synthetic and analytical accounting data.

Note:In accordance with paragraph 3 of Article 4 of Law No. 129-FZ, organizations that have switched to the simplified tax system, are released from the responsibility of maintaining accounting records. At the same time, organizations using the simplified taxation system must keep records of fixed assets and intangible assets in accordance with current legislation.

In accordance with clause 28 of PBU 4/99 “Accounting statements of an organization”, Explanations to the balance sheet and profit and loss statement disclose information in the form of separate reporting forms and in the form explanatory note.

The explanatory note is included in the financial statements in accordance with paragraph 2 of Article 13 of Law 129-FZ, along with the balance sheet and other forms of financial statements.

The explanatory note to the annual financial statements must contain significant information:

• about the organization,
• her financial situation,
• comparability of data for the reporting and preceding years,
• valuation methods and significant items of financial statements.

The explanatory note must state the facts non-use accounting rules in cases where they do not allow to reliably reflect the property status and financial results of the organization, with appropriate justification.

Otherwise, non-application of accounting rules is considered as evasion of their implementation and is recognized as a violation of the legislation of the Russian Federation on accounting.

In the explanatory note to the financial statements, the organization announces changes in its accounting policies for the next reporting year (Clause 4, Article 13 of Law 129-FZ “On Accounting”).

An organization may also provide additional information accompanying the financial statements if it considers it useful for interested users when making economic decisions (clause 39 of PBU 4/99).

It reveals:

• dynamics of the most important economic and financial indicators of the organization’s activities over a number of years;
• planned development of the organization;
• expected capital and long-term financial investments;
• policy regarding borrowings, risk management;
• activities of the organization in the field of research and development work;
• environmental protection measures;
• other information.

Additional information, if necessary, can be presented in the form of analytical tables, graphs and diagrams.

Guided by the requirements of Law No. 129-FZ and the provisions of the current PBUs, we will draw up an approximate Explanatory Note to the balance sheet of the small organization Romashka LLC for 2011.

EXPLANATORY NOTE

to the annual balance sheet for 2011 LLC firm "ROMASHKA"

1. Basic information about the organization.

Limited liability company "ROMASHKA", legal and actual address: 117437, Moscow, Profsoyuznaya st., building No. 110, building B.

OGRN: 1012357987234.

INN: 7723123702.

Checkpoint: 772301001.

Registered with the Federal Tax Service of Russia No. 23 for Moscow on July 20, 2007. Certificate 77 No. 005555155.

The Company's financial statements are prepared on the basis of the accounting and reporting rules in force in the Russian Federation.

The number of employees at the end of the reporting period was 55 people.

In 2011, there was an increase in the Authorized Capital due to retained earnings of previous years in accordance with Minutes No. 1U dated 04/11/2011 by the amount 3 000 000 rub. The size of the authorized capital of the Company as of December 31, 2011. amounts to 3 100 000 rubles

The main activities of the Company are the production and wholesale of hosiery.

Production and financial activities were carried out by the Company throughout the entire period of 2011 and were aimed at generating income in the reporting and subsequent periods.

Materiality level, fixed by the Company in the accounting policy for accounting purposes, is 15% from the corresponding item in the financial statements.

2. Revenue (income) from sales

Revenue from the performance of work, provision of services, sale of products with a long manufacturing cycle is recognized when ready works, services, products (clause 13 of PBU 9/99 “Income of the organization”).

Sales income in 2011 amounted to 2 000 000 rub. (without VAT):

Sales income for previous reporting periods amounted to (excluding VAT):

• 2010 - 1 700 000 rub.;
• year 2009 - 1 500 000 rub.;
• 2008 - 1 200 000 rub.;
• 2007 - 800 000 rub.

Analysis of the above indicators indicates a positive dynamics in the development of the financial and economic activities of the enterprise.

3. Costs associated with sales

Administrative expenses, accounted for in the debit of account 26 “General business expenses”, at the end of the reporting period are not distributed among the objects of calculation and, as conditionally constant, are written off directly to the debit of account 90 “Sales of products (works, services)” with distribution between product groups in proportion to the specific weight of sales proceeds.

Recognized in the cost of sold products, goods, works, services in full in the reporting year, they are recognized as expenses for ordinary activities (clause 9 of PBU 10/99 “Expenses of the organization”).

Costs associated with sales in 2011 amounted to 1 000 000 rub. (without VAT):

For tax accounting purposes, the amount of expenses associated with the sale amounted to 970 000 rub.

The difference that has arisen in accounting for production and management expenses for accounting and tax accounting purposes arose in connection with the use of PBUs for determining expenses in accounting and the provisions of the Tax Code for accounting for expenses for tax purposes.

30 000 rub. arose from a temporary difference in size 20 000 rub. and permanent differences in the amount 10 000 rub. in the following way:

1. Temporary difference in size 20 000 rub. formed due to differences in accounting for depreciation of fixed assets for tax and accounting purposes.

2. Constant differences in size 10 000 rub. (5,000 + 5,000) consist of expenses not accepted for NU purposes, namely:

• 5 000 rub. depreciation of fixed assets is not accepted for NU purposes;
• 5 000 rub. health insurance costs in excess of norms.

Costs associated with sales for previous reporting periods amounted to (excluding VAT):

• 2010 - 900 000 rub.;
• year 2009 - 800 000 rub.;
• 2008 - 700 000 rub.;
• 2007 - 600 000 rub.

Analysis of the above indicators indicates the optimization of costs associated with sales, which has a positive effect on the economic activity of the enterprise.

4. Financial result obtained from main activities

The financial result obtained from the main activities in 2011 amounted to 1 000 000 rub. ( 2 000 000 - 1 000 000 ).

For tax accounting purposes, the amount of profit from sales amounted to 1 030 000 rub. ( 2 000 000 - 970 000 ).

In addition, the main type of activity does not reflect the results of the sale of a large batch of finished products, due to the delay in the transfer of the batch of goods to the buyer LLC “BUTTERUTCH” and the signing of the TORG-12 consignment note.

The sale of goods took place in the 1st quarter of 2012. All work on production of products was completed in the 4th quarter of 2011.

Finished products are reflected in account 43 “Finished products” in the amount of actual costs for their production - 200 000 rub.

The amount of revenue from the sale of this batch of own-produced products is 470 000 rub.

The amount of profit received (before tax) for this project will be 270 000 rub.

5. Other income

The amount of other income in 2011 amounted to 150 000 rub.

100 000 rub.

The difference that has arisen in accounting for other income for accounting and tax accounting purposes arose in connection with the application of PBU to determine the amount of other income in accounting and the provisions of the Tax Code for accounting for income for tax purposes.

The amount of the difference between BU and NU in the amount 50 000 rub. represents a constant difference, which consists of the amount of the contribution of the founder owning 100% of the shares in the LLC.

6. Other expenses

The amount of other expenses in 2011 amounted to 350 000 rub.

For tax accounting purposes, the amount of other income amounted to 185 000 rub.

The difference that has arisen in accounting for other expenses for accounting and tax accounting purposes arose in connection with the use of PBU to determine the amount of other expenses in accounting and the provisions of the Tax Code for accounting for expenses for tax purposes.

The amount of the difference between BU and NU in the amount 165 000 rub. represents a constant difference, which is made up of the following expenses that are not accepted for NU purposes:

• 10 000 rub. interest on loans (including bills of exchange) exceeding the maximum amount accepted for tax purposes in accordance with Article 269 of the Tax Code;
• 50 000 rub. expenses of previous tax periods that are not taken into account in the current tax period;
• 60 000 rub. bonuses from net profit and financial assistance to employees of the organization;
• 40 000 rub. fines and penalties according to the on-site inspection report of the Pension Fund and the Social Insurance Fund dated September 27, 2011 No. 547;
• 5 000 rub. other expenses (including depreciation of non-production assets, purchase of drinking water and other expenses not taken into account for NU purposes).

During 2011, the Company took into account as part of other expenses costs in the form of interest on a long-term bank loan in the amount 150 000 rub.

This loan was provided to the Company by Bank Vozrozhdenie to replenish working capital, in accordance with the loan agreement dated November 15, 2011. No. 2342/2.

The loan amount, according to the agreement, is 1 000 000 rub. and was fully received by the Company in November 2011.

The repayment period for the principal amount of the debt under the loan agreement is November 15, 2014. Interest is repaid monthly.

7. Income tax calculations

The Company forms in accounting and discloses in the financial statements information on calculations for corporate income tax in accordance with the requirements of PBU 18/02 “Accounting for calculations for corporate income tax”.

Profit for income tax purposes in accordance with tax register data and tax return data amounted to 945 000 rub.

The income tax rate in 2011 was 20%. The amount of accrued income tax according to the tax return for 2011 was 189 000 rub.

The amount of accounting profit according to the accounting registers was 800 000 rub.

The amount of the conditional expense reflected in the accounting records in the debit of account 99.02.1 “Conditional income tax expense” amounted to 160 000 rub. (800,000*20%).

The amount of deferred tax assets (hereinafter referred to as DTA) at the beginning of 2011 was 16 000 rub. During 2011, there was an increase in IT by the amount 4 000 rub. in connection with the occurrence of a temporary difference (in terms of depreciation of fixed assets) in the amount 20 000 rub. (20,000*20% = 4,000).

The amount of permanent tax assets (hereinafter referred to as PNA) amounted to 10 000 rub. PNA arose due to the constant difference in the amount of the contribution of the founder owning 100% of the shares in the LLC in the Management Company of the Company in accounting in the amount 50 000 rub.

The amount of permanent tax liabilities (hereinafter referred to as PNO) in 2011 amounted to 35 000 rub. PNO arose due to constant differences in the amount 175 000 rub. ((10,000 + 165,000)*20% = 35,000).

The current corporate income tax calculated in accordance with the provisions of PBU 18/02 is 189 000 rub. ( 160 000 + 4 000 + 35 000 - 10 000 )* and corresponds to the tax return data for 2011.

*Current corporate income tax = conditional expense + Accrued IT + PNA - PNA.

8. Financial result of economic activities

The financial result obtained in 2011 amounted to 615 000 rub. ( 800 000 - 189 000 + 4 000 ).

The financial result of the enterprise in 2011 was affected by the expenses incurred and written off to the financial result:

• managerial,
• commercial,
• others,

related to the sale of a large batch of finished products produced in the 4th quarter of 2011 and sold in the 1st quarter of 2012.

9. Information about the organization’s accounting policies

The regulations on the accounting policies applied by the Company are drawn up in accordance with the provisions of Federal Law No. 129-FZ of November 21, 1996. “On Accounting” and the requirements of PBU 1/2008 “Accounting Policy of the Organization” and other current provisions, guidelines, instructions.

The Company's accounting policy was approved by Order No. 1UP dated December 30, 2010.

The initial cost of the Company's fixed assets is repaid:

• linear method according to depreciation rates established depending on the useful life of the fixed assets in accordance with the Classification of fixed assets, approved by the Decree of the Government of the Russian Federation dated 01.01.2002. No. 1.

In case of acquisition of used fixed assets, the useful life of this property is determined as follows:

• the useful life is reduced by the number of years (months) of operation of this property by the previous owner.

Assets in respect of which the conditions are met that serve as the basis for their acceptance for accounting as fixed assets, costing no more than 40,000 rubles per unit, are reflected in accounting and reporting:

• as part of inventories and are written off as expenses as they are put into operation.

The Company does not create a reserve for OS repairs.

Costs for repair of fixed assets:

• are included in the cost of products (works, services) of the reporting period.

OS inventory is performed:

• 1 time every 3 years.

Inventory assessment upon disposal is carried out by weighted average cost of acquisition/procurement of a group of inventories.

Society creates reserveto reduce the cost of inventories due to financial results.

The reserve for reducing the cost of inventories is formed:

• by the amount of the difference between the current market value and the actual cost, if the latter is higher than the current market value.
• Amount of reserve in the absence of asset movement:
• during the year - 50% of book value,
• over a year - 100% of book value.

Cost of special equipment redeemed:

• in a linear way.

Cost of special clothing, the service life of which, according to issuance standards, does not exceed 12 months, at the time of transfer (vacation) to the organization’s employees

• written off at a time.

In the reporting year, the enterprise created provisions for doubtful debts for settlements with other organizations and citizens for products, goods, works and services with the allocation of reserve amounts to the financial results of the organization (clause 70 of the Regulations on Accounting and Reporting).

The amount of the reserve for doubtful debts is:

• 100%, if a court decision is made not in favor of the Company, or on bankruptcy/liquidation of the debtor.
• 100%, if all attempts made to find the debtor were unsuccessful.
• 50% if pre-trial settlement could not be avoided and the case was sent to court.
• 50% if the debt is overdue for more than 3 months and the debtor does not sign the reconciliation report/does not agree with the amount of the debt.
• 30% if the debt is overdue for more than 3 months and the debtor has signed a reconciliation report and agrees with the amount of the debt.

Revenue from the performance of work, provision of services, sale of products with a long manufacturing cycle is recognized:

• as work, services, products are ready (clause 13 of PBU 9/99).

Production costs are accumulated on account 20 “Main production” with analytical accounting by types of items, types of production costs, and departments.

Unfinished production taken into account:

• on account 20 “Main production” in the amount of the actual cost. Account 21 “Semi-finished products of own production” does not apply.

TO direct expenses

• The actual cost of raw materials, materials used in the production of goods (performance of work, provision of services) and forming their basis, or being a necessary component in the production of goods (performance of work, provision of services);
• Cost of finished products used in production;
• General production expenses.

Overhead costs are accumulated on account 25 “General production expenses” and at the end of the month are written off to account 20 “Main production” with the distribution of costs by type of item.

TO general production expenses related to the production and sale of goods of own production, as well as the performance of work and provision of services include:

• The actual cost of raw materials and supplies used for general production purposes;
• Depreciation charges for fixed assets for production and general production purposes;
• Depreciation charges for intangible assets for industrial and general production purposes;
• Cost of purchased goods and finished products used in production;
• Expenses for work and services of third-party organizations of a production and general production nature;
• Expenses for remuneration of key production personnel with deductions for insurance premiums;
• Deferred expenses in the part related to general production expenses.

The distribution of general production expenses accounted for in the debit of account 25 “General production expenses” is carried out proportionally:

• revenue from sales of products (works, services).

Administrative expenses accounted for in the debit of account 26 “General business expenses” at the end of the reporting period

• are not distributed among the objects of calculation and, as conditional constants, are written off directly to the debit of account 90 “Sales of products (works, services)” with distribution between product groups in proportion to the share of revenue from sales.

Selling and administrative expenses recognized in the cost of sold products, goods, works, services:

• fully in the reporting year they are recognized as expenses for ordinary activities (clause 9 of PBU 10/99).

Cost of purchased goods in accounting it is formed:

• based on the costs of their acquisition. Transport costs for the delivery of goods are accounted for separately on account 44 “Sales expenses”.

Upon departure financial investments their assessment is carried out at the initial cost of each accounting unit of financial investments.

Costs incurred by the organization in the reporting period, but related to the following reporting periods, are reflected in the balance sheet:

• in accordance with the conditions for recognition of assets established by regulatory legal acts on accounting, and are subject to write-off in the manner established for writing off the value of assets of this type (clause 65 of the Regulations on Accounting and Reporting).

Costs that were previously taken into account by the organization as part of deferred expenses reflected in account 97, are not transferred to the accounting registers. In the balance sheet, these costs are reflected in accordance with the conditions for recognition of assets established by regulatory legal acts on accounting, and are subject to write-off in the manner established for writing off the value of assets of this type.

Non-exclusive rights for software products and other similar intangible objects that are not intangible assets according to PBU 14/2007:

• are taken into account in account 97 “Deferred expenses” and are written off as expenses on a monthly basis in equal shares during the term of the contract (clause 39 of PBU 14/2007).

In the balance sheet, these costs are reflected in accordance with the conditions for recognition of assets established by regulatory legal acts on accounting, and are subject to write-off in the manner established for writing off the value of assets of this type.

Reserves for future expenses for the payment of vacation pay are recognized as an estimated liability and reflected in the account for reserves for future expenses. The amount of the estimated liability is included in other expenses. The amount of the estimated liability is determined based on the entire amount of vacation pay due but not taken off by employees as of the reporting date (clauses 17, 18, 19 of PBU “Estimated Liabilities, Contingent Liabilities and Contingent Assets”).

Reserves for upcoming expenses and payments in 2011, the creation of which is not mandatory in accordance with current legislation, are not created.

Loans and credits received are taken into account as part of short-term or long-term borrowed funds, in accordance with the terms of the agreement, namely:

• With a repayment period not exceeding 12 months, loans and credits are taken into account as part of short-term debt on loans and borrowings;
• With a repayment period exceeding 12 months - as part of long-term debt on loans and borrowings.

Transfer of long-term accounts payable debts on received loans and credits are not included in short-term accounts payable.

Interest charges and (or) discount on bonds are reflected as part of:

• other expenses in those reporting periods to which these accruals relate.

CEO

Fomin Ivan Vladimirovich __________________ (signature)

Chief Accountant

Ivanova Elena Sergeevna __________________ (signature)

In accordance with PBU 4/99 “BU”, statements of profits, cash flows and capital are supplemented with notes. The balance sheet is no exception. The explanatory note to the balance sheet is part of the enterprise. It contains detailed information about items of income and expenses.

About the document

The explanatory note is part of the reporting. There is no standardized form for filling it out. In general, the document should contain information showing the implementation of planned indicators. The note is prepared based on the results of the financial statements and discloses information about the elements of accounting policies. Based on the materials provided, a plan for future development can be drawn up.

Structure

An explanatory note to the balance sheet of a government institution must disclose the following data:

1. Describe the main activities, as well as the most significant factors of work.
2. Display accepted methods of maintaining financial statements.
3. Give a comparative description of the current and previous periods.
4. In case of data discrepancies, provide information about the reasons for their occurrence.

The basis for filling in the data is the balance sheet. The explanatory note to the balance sheet contains 19 sections. Let's look at them in more detail.

Organization details

1. Form of ownership and name of the legal entity.
2. Address.
3. Average annual number of employees as of the reporting date.
4. Composition of control bodies.
5. Information about the founders.
6. Amount of capital.
7. Information about auditors.
8. Availability of licenses.
9. Managment structure.
10. The amount of taxes paid in the reporting year.

Information about accounting policies

The note displays the following data:

• rules for registering assets and liabilities;
• the reason and consequences of the policy change;
• data on accounting rules for the next year;
• corrected data is indicated.

An explanatory note to the balance sheet of the institution, which is drawn up, must include information about subsidiaries, group members, their location, the amount of their capital, and the share of assets of each of them. The consequences of policy changes that may have an impact on the financial position or other results of the organization's activities are assessed in monetary terms.

Information about assets and liabilities

The explanatory note to the balance sheet of the Republic of Belarus contains the following data on the operating system:

• original cost and the amount of accrued depreciation at the beginning and end of the year;
• period of use of the object;
• methods of calculating depreciation;
• movement of leased assets and fixed assets by groups;
• real estate objects that are at the stage of state registration, but accepted for operation;
• asset valuation methods;
• the amount of write-down of fixed assets, which is transferred to retained earnings.

Filling out the explanatory note to the balance sheet also consists of displaying data on the small business enterprise:

• methods for estimating reserves;
• consequences of changes in methods;
• the amount and movement of funds to reduce the value of valuables.

Information about credits, loans and financial investments is also displayed:

• availability, repayment terms, changes in the amount of debt;
• types, repayment terms of issued bills and bonds;
• the amount of interest costs that is included in operating expenses and the cost of assets;
• the value of the weighted average rate;
• methods for assessing investments upon their disposal and the consequences of their changes;
• value, types of securities encumbered with collateral;
• the cost of the transferred Central Bank and financial investments;
• composition and movement of the impairment reserve;
• valuation of debt securities and loans taking into account discounts.

For assets and liabilities in foreign currency, the note displays:

• included in financial results or otherwise accounted for;
• exchange rate of the Bank of Russia as of the reporting date.

Balance sheet structure analysis

This section includes an assessment of the economic condition of the enterprise. It is drawn up in accordance with the Instructions for monitoring the solvency of entities. The section analyzes all types of liquidity, level of funding, profitability, level of financial dependence and sustainability.

The analytical part of the note should contain the procedure for calculating indicators. Let's look at the main ones.

1. Current liquidity - reflects the level of collateral with assets. A high value of the ratio indicates a stable financial condition:

Ktl = A2: (P5 - p. 640), where:

• A2 - the result of the second section of the balance sheet asset (p. 290);
• P2 is the result of the fifth section of the passive (p. 690).

2. Current asset coverage ratio - shows what part of the joint-stock company was formed from its own funds:

K ao = (P3 + p. 640 - A1) : A2, where:

• P3 - third section of the passive (p. 490);
• A1 is the first section of the asset (p. 290).

3. Accounts payable coverage ratio - shows the organization’s ability to pay off obligations after the sale of assets:

To kz = (P4 + (P2 - p. 640)) : VB, where:

• P4 - the result of the 4th section of the passive (p. 590);
• VB - balance sheet currency (p. 300).

An organization is considered insolvent if, for 4 quarters, an unsatisfactory balance sheet structure is displayed, as evidenced by the value of the debt coverage ratio at a level above 0.85.

4. The solvency index shows what part of short-term loans the company can repay at the time of reporting:

And pl = (short-term overdue debt - long-term overdue debt) : balance sheet currency.

Income and expense data

This part displays information about sales volumes and geography of sales markets, the composition of costs, the availability of reserves for future payments, the structure of other income and expenses, and emergency factors. Separately, information is provided on contracts that provide for non-monetary payments: their quantity, share of revenue, methods for determining the value of transferred goods.

Activity rating

The standard form of an explanatory note to the balance sheet contains a section that displays:

• breadth of sales markets, availability of exports;
• reputation of the enterprise in the market;
• level of performance indicators;
• efficient use of resources.

Change in balances

If there was a reorganization of the enterprise during the reporting period, then this data is entered into the balance sheet. The explanatory note to the balance sheet must contain information about the reasons and scope of changes. This section is also completed if the data at the beginning of the year changes.

Affiliates

Drawing up an explanatory note to the balance sheet involves displaying information about the presence of subsidiaries, founders and shareholders:

• their list;
• the nature of the relationship;
• reasons for being classified as affiliated persons;
• types of operations and methods for determining prices for them;
• share of shares owned.

Activity facts

This section displays information about the organization’s guarantee and legal obligations, their value and the amount of the created reserve.

Data on joint activities

1. Number of partnership agreements.
2. Goals of activity.
3. Deposit amount.
4. The value of assets and liabilities, profit or loss for the current year.
5. Information about the assets used and joint operations.

Segment Information

The format of the explanatory note to the balance sheet for the Social Insurance Fund implies the presence of a section that displays information about associations and unions - provided that the constituent documents stipulate that information on the financial statements is submitted as a summary:

• list of departments;
• total revenue;
• profit or loss;
• assets, liabilities, capital investments in fixed assets and intangible assets;
• the amount of depreciation charges;
• share in the net profit of subsidiaries;
• the amount of investment in joint activities.

Events after the reporting date

This section displays information about the facts of economic activity that greatly influenced the amount of assets and liabilities. They need to be fully disclosed. Failure to display data may influence the decisions of users of financial statements. Events are included in the note, but changes are not made in the report. The assessment of consequences in monetary terms must be documented or indicated that this is impossible to do.

A copy of the explanatory note to the balance sheet may contain the following facts:

• declaring the organization's debtor bankrupt;
• an assessment of assets, the results of which confirm the change in their value;
• obtaining data on the financial status of a subsidiary whose securities are listed on the stock exchange;
• selling inventory at inflated prices;
• declaration of dividends;
• reimbursement of a claim from an insurance company;
• adoption of a court decision requiring the creation of a reserve;
• reorganization, reconstruction of the organization;
• making a decision on the issue of Central Bank;
• transaction related to the purchase and sale of fixed assets;
• fire, emergency situation that resulted in the destruction of part of the assets;
• termination of the main activity;
• reduction in OS cost;
• actions of government authorities;
• unpredictable changes in exchange rates and asset prices.

State aid

An explanatory note to the balance sheet of an educational institution and any other organization that receives assistance from the budget must contain information about:

• the nature and amount of cash and credit receipts;
• targeted use of financial resources;
• unfulfilled conditions for the provision of funds and related obligations.

Environmental indicators

The sample explanatory note to the balance sheet of enterprises whose activities negatively impact the environment differs from the standard document. Additionally, it includes:

• data reflecting the degree of impact (emissions, waste);

• information on land reclamation;

• data on environmental protection costs.

Information about JSC

An example of an explanatory note to the balance sheet, presented below, contains the following information about the Central Bank:

• the number of issued and paid securities, their nominal value;
• movement of shares at the beginning and end of the period;
• the value of securities owned by the joint-stock company and its subsidiaries;
• availability of reserves and the purpose of their creation.

For additional issue the following shall be indicated:

• reason for release;
• date of;
• terms of implementation;
• number of issued ordinary shares;
• the amount of proceeds from the placement.

Section 17

This paragraph displays the data required by PBU 18/02:

conditional expense (income) according to the NPP;

differences that resulted in adjustment of the tax amount;

PNO, IT, SHE;

reasons for changes in tax rates;

amounts ONO and ONA written off in connection with the disposal of fixed assets.

Termination of activities

If the organization is at the stage of liquidation, then the final balance sheet is submitted to the Federal Tax Service. The explanatory note to the balance sheet contains the following information:

description of the liquidated activity;

work completion date;

value of property and obligations to be disposed of;

movement of funds within the framework of current, investment and financial activities;

amounts of revenues, expenses, profits, losses before tax, accrued by NPP;

cancellation of liquidation.

Other indicators

There are few of them, but you shouldn’t discount them:

competitiveness of goods;

credit policy, solvency;

information about property transferred and received for management.

Example of an explanatory note to the balance sheet

Explanations to the balance sheet of JSC "Organization" for 2015:

1. General information

Joint Stock Company "Organization" was registered by the Federal Tax Service No. 5 for St. Petersburg on October 28, 2010 (KPP, TIN, state registration certificate data, address are further provided.)

The balance sheet is compiled in accordance with the current accounting and reporting rules (IFRS).

Authorized fund: 2,000,000 (two million) rubles.

Number of ordinary shares: 1,000 pieces with a par value of 2,000 (two thousand) rubles.

Main type of employment: milk processing (OKVED 15.50).

Composition of founders:

Ivanov Andrey Sergeevich - member of the board of directors;

Averin Stepan Pavlovich - member of the board of directors.

2. Accounting policies

Accounting policy order No. 158 was signed by the director on December 25, 2013. ( The provisions are briefly described: methods for calculating depreciation, assessing liabilities and assets, etc. ).

3. Balance sheet structure (the share of each line of the balance sheet is shown and changes in indicators are calculated).

4. Valuation of assets (the value of property is correlated with capital).

5. Analysis of financial indicators (liquidity, profitability, provision of reserves, level of financial dependence, etc. are calculated).

6. Composition of the operating system (million rubles) - for convenience, we present it in the form of a table.

Name	Initial cost	Accrued depreciation	Book value
Land
Vehicles
Equipment
Inventory

7. Liabilities and reserves

As of December 31, 2015, an estimated liability for vacation payment was created in the amount of 1.5 million rubles, the number of days is 66, the period of use is 2016. The reserve for doubtful debts was formed in the amount of RUB 1.687 million. due to the presence of overdue and unsecured debt of LLC "Enterprise". There is no provision for reducing the value of inventories, since there are no signs of their depreciation.

8. Labor and wages

Salary arrears for December 2015 amounted to 1.79 million rubles. Payment deadline - 01/15/16. Staff turnover - 24.99%, payroll - 166 people. The average monthly salary is 20,765 rubles.

9. Collateral issued and received (species are indicated).

Director of JSC "Organization" Signature

Conclusion

At the end of the calendar year, a balance sheet is submitted to the Federal Tax Service. An explanatory note to the balance sheet is drawn up in any form. It may contain tables and charts. It provides a variety of detailed information: from the provisions of accounting policies to the calculation of financial indicators. The main requirement is that the information must be reliable and useful to users.

Any enterprise reporting will be clearer for information users if there are explanations. Financial and accounting statements include an explanatory note to the balance sheet and financial results statement. Let's look at a sample of filling out the notes to the balance sheet.

Explanations drawn up for financial and accounting statements are intended to:

• reveal in detail the meaning of reporting indicators;
• link the contents of reports to each other;
• reflect the current accounting policy of the enterprise;
• justify the obtained financial result.

This is an important document, based on which you can conduct an in-depth analysis of the organization’s economic activities.

All organizations that maintain full accounting records must draw up an explanatory note. The exception is small enterprises that are allowed a simplified accounting procedure and are not subject to mandatory audit.

The law does not establish a mandatory form of presentation; it can be formatted using tables and text. There is only the form recommended by the Ministry of Finance.

Deadlines and procedure for submitting an explanatory note

The explanatory note is drawn up within the same time frame as the accompanying financial statements. The presentation procedure also coincides with the procedure, deadline and recipients for submitting annual or interim accounting and financial statements.

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Contents of the explanatory note to the balance sheet

In the process of drawing up explanations, it is necessary to disclose the indicators shown in the reports in aggregate:

• cost of fixed assets;
• value of intangible assets;
• inventory cost;
• accounts payable;
• accounts receivable;
• structure and size of financial investments.

It should also be taken into account that the content of not only balance sheet items is disclosed, but also other forms of reporting, especially with regard to the Statement of Financial Results.

Almost always, if an enterprise receives a loss at the end of the reporting period, the tax authority requires it to be justified and to confirm the correctness of accounting for income and expenses. In this situation, a combination of balance sheet indicators, cash flow statement, and statement of changes in capital can confirm the correctness of tax calculations.

If the company changed its accounting policy, then it is necessary to reflect this in the text and explain the essential conditions of the accounting policy.

The explanatory note also discloses the composition of affiliated persons.

Sample explanatory note to the balance sheet

Example 1. How to start an explanatory note

Example 2. How to explain individual balance sheet items

In the explanatory note we provide, for example, the following tables, explaining which indicator is indicated in the corresponding line of the balance sheet.

Example 3: How to Explain an Income Statement

With careful and systematic maintenance of tax accounting registers, it will not be difficult for an accountant to enter accounting results into a simple table. In this case, the cost structure of the enterprise is clearly visible.

This method of explanation is also convenient for further preparation of the Report for the founders. The visibility of expense items allows the owner to make adequate decisions and assess the profitability of business areas.

If an enterprise receives income from several types of activities, it is also advisable to break down the gross income received into individual items:

Thus, a competently and fully drawn up explanatory note addresses the following issues:

• reduces the number of requests for explanations received by the organization from tax authorities;
• reduces the likelihood of on-site inspections;
• gives reporting users the most accurate picture of the organization’s economic life;
• serves as the basis for deep analytics of business processes;
• helps owners correctly assess the situation and develop profitable areas.

In a broad sense, the explanatory note contains general information about the documents presented. It does not have a unified form, is compiled on an A4 sheet in printed form and can contain several pages. The text is kept in an official business style. Information is presented clearly and concisely. Each area has specific requirements for drawing up an explanatory note. At the end of the article you can download a sample example for accounting.

An explanatory note is attached to the balance sheet. It is intended to decipher accounting data and contains data on the accounting policies of the enterprise. Some of this information is not appropriate to enter into the reporting form. However, their provision is important for assessing the company's performance.

Important! A detailed explanatory note facilitates the presentation of the balance sheet and reduces the likelihood of an unscheduled audit.

Submission of an explanatory note is not required from:

• non-profit organizations;
• small businesses that are not required to conduct audits.

For organizations that do not carry out commercial activities, they may be required to provide an explanatory note if they receive income. For example, if obsolete equipment is written off, it does not need to be reported. When it was resold and the organization made a profit, you will need to fill out an explanatory note.

Individual entrepreneurs do not submit a balance sheet. Therefore, they will not have to create this form either. For enterprises operating on the simplified tax system, a separate, simplified reporting form is provided.

For other organizations submitting balance sheets in the general manner, the rule applies: any significant change in capital must be reflected in the explanatory note. These include:

• change of type of activity;
• taking out a long-term loan;
• as a result of emergency circumstances causing damage to the organization's property.

What should be contained in the explanatory note

PBU regulates what information an explanatory note to the balance sheet should contain. It fully discloses information about the organization’s policies that are needed to evaluate its activities. A unified form is not provided. The company is developing its own prototype.

In general, the explanatory note should contain:

1. A selection of information about the activities of the enterprise.
2. Changes in cash holdings or property and disclosure of the reasons for the current situation. As an example, the taking out of credit funds is indicated, and the need for additional financing is stated as the reason.
3. List of decisions that were made during the reporting period.
4. Indicators affecting the financial stability of the enterprise.
5. Adjustments relating to the distribution of financial results.

The explanatory note will contain data reflecting the status during the reporting period:

• fixed assets;
• intangible assets;
• prepared securities;
• cash investments;
• parishes;
• expenses;
• accounts receivable and accounts payable.

Learn more about document sections

The following lists the main sections that can be included in the text of the note. There is no need to list them all. You need to select only those items whose description is appropriate for a particular organization.

1. General information. This subheading provides information about the organization: name, form of ownership, founders, number of employees, management system. If there are licenses, they are also worth mentioning. Next, you need to enter information about tax contributions for the current period.
2. Changes in accounting policies. Adjustments made to the accounting system will be indicated and disclosed here. In addition, justification for innovations will be required.
3. Assets and liabilities. This section provides detailed information on each segment, including fixed assets, inventories, loans, deposits, and foreign currency transactions. Regarding intangible assets and fixed assets, data on depreciation or markdown is indicated. If a company takes out a loan, the terms for repayment of funds and interest costs are prescribed. When there are foreign currency obligations, the exchange rate is specified.
4. Balance sheet structure and profit movement. Based on the calculations in this section, a short-term forecast of financial development is given. An assessment of the solvency of the enterprise at the moment is given. At the end, a long-term forecast of financial condition is given, sources of income and the level of dependence on third-party investors are taken into account.
5. Volume of income and expenses. This section details the organization's cash flows. Information on the volumes of goods and services sold is indicated. Production costs and the structure of reserves are highlighted. Separate agreements are stipulated under which counterparties reimburse the cost of products in non-cash.

What other sections can be included in the form?

The following sections continue the explanatory note.

1. Clarifications on the presented financial statements. This section should contain only essential information that was not disclosed in the prescribed forms.
2. Level of business activity. Here you need to provide information about the product market, what reputation the company has among clients, and how efficiently resources are spent.
3. Information about opening balances. Data on the reasons for their changes and the difference in values ​​are indicated.
4. Affiliates. A list and justification of the attitude towards affiliates of specific organizations, the nature of the transactions carried out, and methods for adjusting prices for these transactions are introduced.
5. Conditional facts of economic activity. These include guarantees, issuance of bills, and court cases. The reason for the conditional fact, its nature, and the amount of money allocated to resolve it are stated. Forecasts of the consequences if this event occurs.
6. Cooperative activity. Here simple partnership agreements are noted and information on them is provided.
7. Tax assets. In the section you need to specify details of the movement of income and expenses, costs of tax contributions.

An explanatory note to the balance sheet - is it required as part of the annual reporting, who should prepare it and who may not do this, and most importantly, what does it look like? We will talk about this in our article.

Why explain the balance?

Reporting must be reliable and complete and provide the user with a clear picture of the financial position of the organization. In the balance sheet and Form 2 we present generalized indicators, from which, as a rule, it is difficult to draw comprehensive conclusions. This means that they need to be explained.

Let’s take the line “Accounts receivable” as an example. To put this figure in the report, you need not only to collect the balances of all settlement accounts, but also to take into account the amount of the reserve for doubtful debts (if any). It is not shown separately in the balance sheet, and interested users (owners, investors, regulatory authorities) need additional explanations in this regard.

All organizations must formulate explanations, with the exception of:

• small enterprises entitled to simplified accounting and reporting;
• public organizations that do not conduct business activities and have no sales.

Moreover, explaining the balance is in the interests of everyone who cares about their reputation. The more fully the figures from the report are disclosed, the more transparent the company’s activities will appear. Such reporting will help not only strengthen your credibility, but also attract new investors. Explanations on the balance sheet will also help avoid unnecessary questions from regulatory authorities.

Read about the requirements for accounting reporting in the material “What requirements must accounting satisfy?” .

NOTE! In paragraph 39 of PBU 4/99 (approved by paragraphResolution of the Ministry of Finance of the Russian Federation dated July 6, 1999 No. 43n) it is determined that companies have the right to provide additional information along with reports if it is useful for external users of the reports. At the same time, the Ministry of Finance believes that companies are obliged to disclose information related to accounting reporting (information of the Ministry of Finance dated December 4, 2012 No. PZ-10/2012).

What information does the balance sheet note contain?

Usually, no explanations are provided separately for the balance sheet alone. Since it is not compiled alone, but as part of the reporting, an explanation is given immediately for all submitted reports.

Read about the reporting features of companies using the simplified tax system in the material “How to fill out a balance sheet using the simplified tax system?” .

It should be noted that all traditional reports decipher some lines of the balance sheet, that is, they are also its explanations.

So, from the financial results report we learn about the amount of net profit for the period, and it is an integral part of the line “Retained earnings (uncovered loss)” of the balance sheet.

The cash flow statement provides information on how the “Cash and Cash Equivalents” line indicator is generated (broken down by line of business).

The statement of changes in capital deciphers the information reflected in section 3 of the balance sheet.

The remaining lines also require decoding and explanation. They are usually presented in the form of tables - they are convenient and visual. You can develop their form yourself, or you can use ready-made samples - they are in Appendix 3 to the order of the Ministry of Finance of Russia dated July 2, 2010 No. 66n.

NOTE! Order No. 66n contains an example of preparing explanations for balance sheet information about intangible assets, R&D, fixed assets, financial investments, inventories, debts of debtors and creditors, estimated liabilities, and state aid.

What does a sample explanatory note to the balance sheet look like?

There is no single sample of explanations for the balance sheet. Everyone explains what they consider necessary and useful for reporting users.

We'll show you what an explanation of a balance sheet might look like using an example.

Explanations to the balance sheet JSC "Symphony" for 2018 1. General information Joint Stock Company (JSC) "Symphony" was registered by the Federal Tax Service No. 6 for Moscow on October 29, 2009. (The following information can be provided: OGRN, INN, KPP, details of the state registration certificate, address.) The balance sheet is formed in accordance with the accounting and reporting rules in force in the Russian Federation (if the balance sheet is prepared according to IFRS, this must be indicated). Authorized capital: 1,000,000 (one million) rubles. Number of shares: 1,000 pieces with a par value of 1,000 (one thousand) rubles. Main activity: milk processing and cheese production (OKVED 10.51). Composition of affiliates: Steklov Andrey Anatolyevich - member of the board of directors; Zavarzin Stepan Nikolaevich - member of the board of directors. 2. Basic accounting policies The accounting policy was approved by order of the director dated December 25, 2017 No. 156 (the following is a brief summary of its main provisions: depreciation methods, methods for assessing assets and liabilities, etc.). 3. Balance sheet structure (each line is shown as a percentage of the balance sheet currency, changes for the period are calculated). 4. Estimation of net asset value (the value of net assets is correlated with the authorized capital). 5. Analysis of key financial indicators (financial ratios are indicated: liquidity, reserve coverage, autonomy, return on assets, etc.; this section analyzes the degree of dependence on creditors, position on the securities market, etc.). 6. Composition of fixed assets (rub.): Name Initial cost Depreciation Book value as of 12/31/2018 Land Buildings, structures Vehicles Equipment Inventory 7. Estimated liabilities and provisions As of December 31, 2018, an estimated liability for payment of regular vacations was formed in the amount of RUB 1,426,000, the number of unpaid vacation days is 67, the due date is 2019. The reserve for doubtful debts was formed in the amount of RUB 1,678,000. due to the presence of overdue and unsecured debt of Quiet Dawns LLC. A reserve for impairment of the value of inventories was not created due to the absence of signs of impairment of inventories. 8. Labor and wages Payables for wages as of December 31, 2018 amounted to RUB 1,679,000. (for December 2018, payment deadline: 01/15/2019). Personnel turnover in the reporting period was 24.98%, the payroll number was 167 people. The average monthly salary is 20,675 rubles. 9. Issued and received security and payments (all their types are indicated). 10. Other information (A list of extraordinary facts, their consequences, a description of significant facts that affected the balance sheet indicators, major transactions completed, events after the reporting date, adjustments made and other necessary information is provided.) Director of JSC "Symphony" Devyatov Devyatov A. N. 03/20/2019

Results

Explanations to the balance sheet are allowed to be drawn up in any form. They may contain tables, graphs and charts. The detail of information in them can be very varied - it all depends on the company’s intention to disclose any important indicators in a certain way. The main thing is that the information contained in the explanations is reliable and useful for users.