engleski

Significance of Notes to the Financial Statements in Business Decision Making

The notes, together with other annual financial statements, represent an important source of information for the shareholders and other financial statements’ users in business decision making. Over the last decade, relevant accounting organizations point to an increasing length and complexity of disclosures in the financial statements. Disclosure of a large volume of the notes with irrelevant information makes it difficult for the users to find and recognize material information for decision making process. This paper provides an overview of the most important projects of relevant accounting and non‐accounting organizations related to improvement of disclosures in the notes. Furthermore, an empirical research regarding the content and structure of the notes to the financial statements of large domestic and foreign companies from confectionery industry has been conducted. The purpose of the research was to identify deficiencies in the notes and to provide recommendations for its’ improvement. The focus of this paper has been put on disclosure requirements listed in IFRSs. The research results indicate that a significant part of the notes to the financial statements consists of IFRSs’ provisions transferred from a particular standard. The research has shown that IFRSs lists to many disclosure requirements which leads to increasing length of the notes. Based on the research results, paper provides some recommendations to increase the quality of the notes.

notes to the financial statements, business decision making, financial statements, financial information, non‐financial information

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