235 Landing Page.xml | DART – Deloitte Accounting Research Tool

Notes to Financial Statements

ASC 235 Notes to Financial Statements

This Topic discusses guidance on the “content and usefulness of disclosure by an entity of the accounting policies judged by management to be most appropriate to fairly present the entity’s financial statements.”

Overview

ASC 235 notes the following:

The accounting policies of an entity are the specific accounting principles and the methods of applying those principles that are judged by the management of the entity to be the most appropriate in the circumstances to present fairly financial position, cash flows, and results of operations in accordance with generally accepted accounting principles (GAAP) and that, accordingly, have been adopted for preparing the financial statements.

The accounting policies adopted by an entity can affect significantly the presentation of its financial position, cash flows, and results of operations. Accordingly, the usefulness of financial statements for purposes of making economic decisions about the entity depends significantly upon the user’s understanding of the accounting policies followed by the entity.