Footnotes

There are generally two kinds of footnotes. The first type identifies and explains the major accounting policies of the business. The second type provides additional disclosure, such as details of long-term debts, stock option plans, details of pension plans, previous errors, lack of internal control and law suits in progress.

Although the footnotes are required, there are no standards for clarity or conciseness. Footnotes often seem intentionally legalistic and are awkwardly written [Tracy,1980].