Notes to financial statements

The Annex (English notes ) is a document of accounting and in addition to balance sheet and profit and loss statement ( P & L), the third compulsory part of the financial statements of certain companies. Its purpose is to give a true and fair view of the assets, financial and earnings position of the company, particularly through a quantitative and qualitative information, which is not included in the figures of the balance sheet and the income statement.

Installation requirement

Mandatory preparing the Annex for corporations, commercial partnerships is no natural person as personally liable partners, cooperatives and companies that fall under the Public Disclosure Act (see § § 264, 264a HGB). The consolidated financial statements of the consolidated financial statements shall be drawn up by the parent company. The document is subject to legal review and disclosure requirements, which are easier for small and medium-sized companies.


A detailed catalog of mandatory information to be included in the appendix containing the § 284 and § 285 of the Commercial Code. They can be summarized to the following three points:

  • General principles of accounting, valuation and translation adjustments:

The accounting policies applied in the financial statements methods of accounting and valuation of individual balance sheet items are presented and explained in the notes. It thus contains the information about which items were included in the balance sheet and the value at which they are stated. The methods have changed compared to the previous years, the deviations and their influence are present on the net assets, financial position and earnings. For receivables and payables in foreign currency, the exchange rates are indicated.

  • Illustrative, supplementary and corrective information to the balance sheet and the profit and loss account:

Items that are summarized in the balance sheet for clarity must be broken down in the Annex. This applies especially to fixed assets. Value and development of the individual assets are explained in fixed assets. The selected type of depreciation is described in the Appendix. The summed in the profit and loss account revenues are broken down by categories of activity and geographical markets, when the function of expense method must be material and personnel expenses are separately disclosed.

Consist card - choice rights for numerous mandatory information of the financial statements. For reasons of clarity and rationality, it may be advisable to omit items in the balance sheet and income statement and included in the appendix. Additional information is also information on matters that need not be accounted for, but which are necessary for a realistic assessment of the situation, for example, future, already fixed financial obligations.

Corrective information may be necessary to lighten a too favorable or too unfavorable image. Examples of this are unique, extraordinary results through the sale of sites or long-term contracts that result in the current fiscal year for the reporting of losses. The impact of tax regulations, so the deviation of control and balance of trade is explained in the appendix. Also pending transactions are disclosed in the notes, otherwise if there is no true and fair picture of a capital company by balance sheet and income statement is mediated (cf. § 264 paragraph 1 sentence 1 HGB). By § 285, No. 3 and 3a, some explanations are required to pending transactions in the notes explicitly.

  • Other information:

The appendix contains the names of all members of management and the supervisory board and details of all its references and subscription rights and the number of employees.

The appendix in the IFRS financial statements

The tasks of the statements in the international financial statements in accordance with International Financial Reporting Standards ( IFRS) are set out in International Accounting Standard 1 (IAS 1). The notes contain:

  • The accounting policies: This includes information about the creation of foundations of the financial statements and the specific accounting and valuation principles are to be understood.
  • All information which are required for the degree, but not already exist elsewhere.
  • All information that is not required, but for a fair presentation, so a realistic representation of the company's situation, are essential.

A correction function have the notes not unlike the HGB appendix because the IFRS financial statements may not contain true and conflicting information. Formal requirements may not lead to an obfuscation of the realistic representation of the company's situation so. When in doubt, a deviation from the individual instruction is offered here under the principle substance over form.