Financial statements provide useful and necessary information to their readers. However, some significant financial facts may not appear on the financial statements and thus need to be disclosed in other ways to the users of the financial statements. The requirements to disclose such information has increased in response to demands for increased transparency.
Answer the following questions:
What are the reasons for the increase in disclosure requirements? Do you see these reasons forming the basis for even more disclosure in the future?
Along with increased disclosure to shareholders, the concept of differential disclosure has arisen. What is this concept and do you agree with it? Why or why not?
What are some of the common types of information provided in the notes to the financial statements?