3. Other Financial Information Sources
c. describe the importance of financial statement notes and supplementary information - including disclosures of accounting policies, methods and estimates - and management's commentary;
e. identify and describe information sources that analysts use in financial statement analysis besides annual financial statements and supplementary information;
Why are financial footnotes are an integral part of financial statements?
They provide information about the accounting methods, assumptions and estimates used by management to develop the data reported in the financial statements. They provide additional disclosure in such areas as fixed assets, inventory methods, income taxes, pensions, debt, contingencies such as lawsuits, sales to related parties, etc. They are designed to allow users to improve assessments of the amounts, timing, and uncertainty of the estimates reported in the financial statements.
What are supplementary schedules?
In some cases additional information about the assets and liabilities of a company is provided as supplementary data outside the financial statements. Examples include oil and gas reserves reported by oil and gas companies, the impact of changing prices, sales revenue, operating income, and other information for major business segments.
What is a 10-Q?
A 10-Q is an interim report. Publicly held companies must file form 10-Q on a quarterly basis. It is far less detailed than annual financial statements, as it contains unaudited basic financial statements, unaudited footnotes to financial statements, and management discussion and analysis.