Author Archives: Karl

Subsequent events note in the Annual Report

A subsequent event is something that happened after the balance sheet date but before the Annual Report was released to the public.

The reason it’s important for the Annual Report itself is the significance of the event. A subsequent event isn’t for an example you buying goods or collecting your receivables – it’s your everyday business transactions and they are to be expected to be happening.  Continue reading →

Currency translation profits and losses – when are they part of financial and when operating results?

First off this question may seem confusing since you’ve always shown those profits and losses as a part of one or the other or even something called “non operating income”. One way or the other, there’s also an option to split those results into two groups – one part of the operating results and the other as a part of financial expenses and income.  Continue reading →

Intangible assets note in the Annual Report

Intangible assets note is like property, plant and equipment one really. It’s presented as reflecting movements for both current and prior period and similarly also for subgroups of intangible assets. The groups themselves obviously differ and are mostly something you can come up with on your own depending on your assets (i.e. “software”, “trademarks” etc.). The way the note is build up is also having the subgroups as columns in which brought forward balances are followed by movements and ending in carried forward balances.  Continue reading →

Property, plant and equipment note in the Annual Report

Property, plant and equipment note is one of those few notes presented as reflecting movements for both current and prior period. Bear in mind that it’s not only the total balance the figures are presented for, but subgroups as well (i.e. “land and buildings”, “machinery and equipment”, etc.). The way the note is build up is having the subgroups as columns in which brought forward balances are followed by movements and ending in carried forward balances. Note here that the carried forward balance of the prior period is the brought forward balance of current period. They must equal.  Continue reading →

Notes to the financial statements within the Annual Report

Those details to the main statements are essentially called notes to the financial statements. The very first note is about the accounting principles and afterwards we move into more in depth with analyzing the contents of numbers presented in the main financial statements. Note here that, as always, only significant balances should be disclosed in more detail. For an example if you have very little cash and cash equivalents, ask yourself if it’s really this relevant to make a separate note about it saying that you have x amount in bank accounts and y amount as cash? Does it really give the readers anything relevant they did not yet read from the balance sheet? Always ask yourself what the readers are getting extra if you make the note.  Continue reading →