Financial Statement Disclosure Overload
Karen Coleman

Recent trends in financial reporting reflect an increase in the amount of disclosures found in financial statements. The increased amount of disclosures is primarily a result of the efforts of the SEC and the FASB. Pronouncements issued by the SEC and the FASB often include disclosure requirements that are designed to improve the information that companies present in their financial reports. There are numerous reasons for this increased emphasis on financial reporting disclosure requirements. Some of the more significant reasons include the complexity of the business environment and the necessity for accurate and timely financial information. (http://www.sec.gov/divisions/corpfin/acctdisc.htm).
The financial disclosure notes are an integral part of the financial statements. Although they are normally drafted in technical language, the notes are an accountant’s means of explaining and even amplifying the items presented in the main body of the statements. (AR Section 90-Professional Standards, November 2014). Some disclosures are broad in nature and their implications, these can be notes that provide fundamental details about how a company handles its finances, such as its criteria for recognizing revenue and expenses. Others are much narrower, and can provide the context for one single amount that is included in the statement. Many disclosures focus on risk and uncertainty, such as how much of accounts receivable is likely to go uncollected, or how many warranty claims it expects to have to handle.
There are several common disclosure notes that are the part of every company’s financial statements. They include but are not limited to: Significant accounting policies; this information is designed to inform the statement reader of the accounting methods used in preparing the information included in the