ACCA Applied Knowledge · Financial Accounting · Disclosure notes
Which statement best describes the purpose of the notes to the financial statements under IFRS?
The notes give information not shown on the face of the primary statements but needed to understand them, such as accounting policies, breakdowns of balances and additional disclosures. They are an integral part of the financial statements, not a substitute for them or optional extras.
- AThey provide information that is not presented on the face of the primary statements but is needed to understand themCorrect
- BThey replace the need to present a statement of financial position
- CThey allow management to correct errors made in the primary statements
- DThey are optional commentary that users may ignore without affecting understanding
Explanation
Notes contain additional information, such as accounting policies and breakdowns of figures, that is needed to understand the primary statements. They do not replace the primary statements, correct errors, or serve as optional commentary. The notes form an integral part of the financial statements.
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