Question

What information can one learn about the state or local government from the notes that is not apparent from the face of the fiancial statements?

Answer 1

The notes sections are no doubt an integral part of a company's financial statements. They play a really important role because it is not possible to dissemenate all the relevant information on face of the financial statements.

These notes provide us the information realted to company's accounting policies, what revenue recognition method they are using, how they are valuing their inventories and PP&E, how they are treating goodwill and other intangible assets, what methods they are using to translate foreign income etc. Along with that, we also get the information about employee benefit plans, leases, derivative instruments and hedging, stock options, commitments and contingencies etc.