FASB ASC 235 - Notes to the Financial Statements


The Financial Accounting Standards Board (FASB) released the 200 section of the Accounting Standards Codification for the purpose of discussing the braod topic of Presentation. Accounting Standards Codification 235 (ASC 235) was released to address the more specific topic of the notes to the financial statements.

Often times accountants and investors will tell you that the notes to the financial statements are where one really learns about a company because it breaks out in detail the broad strokes painted by the financials. Additionally, based on the circumstances of the company, they will be required to separately disclose certain important things within the notes that may raise confusion about the true picture of the company’s books.

Within these notes, the financials are dis-aggregated down to a more granular level that often provides a better picture of the company’s position in a certain area. One example may be specifying who the related party transactions were with and how much they made up of the total of the accounts receivable. By taking these out of AR, you could get a better picture for how much external business the company was bringing in.

Check out more high level explanations of the FASB ASC in our Guide to the Accounting Standards Codification!

For more in depth information on this and other FASB ASC topics, check out the following books.

*Technical versions of the standards, authoritative literature can be found in the Financial Accoutning Standards Board website.

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