The main purpose of the explanatory note is summary attached material. The sample can be downloaded for free via a direct link.
Explanatory note will be necessary for its compiler for various reasons: to balance sheet, project, work program, calendar and thematic planning, diploma material, curriculum and more. Its design will not cause any particular difficulties for the author, since the form of execution of the explanatory note is free. On this free resource page you can download a sample document for free and apply it in your own practice. The simplest format is easy to edit.
The main purpose of the explanatory note is a brief summary of the attached material. It voices the main idea of the totality of the attached documentation. An explanatory note has many similarities with an explanation, cover letter, content, and introduction. The structure and content of the accompanying documentation can be presented on several sheets and on one page. This circumstance depends on the amount of information provided and the presentation of the material by the author.
Mandatory paragraphs of the explanatory note
:- Title, number, date, place of compilation;
- Details of the institution and leadership positions;
- Information about the actual state of affairs;
- Explanation of some indicators, terms, concepts;
- Signatures of superiors and transcript.
One of the conditional forms financial statements is an explanatory note. As the name itself suggests, it contains a certain decoding of the statements, that is, it actually describes in words the financial position of the company at the end of the year and the changes that occurred in it during the reporting period.
Explanatory note to the balance sheet - mandatory or not?
First of all, we note that the explanatory note and the explanations to the balance sheet should not be confused. The latter, according to paragraphs 5 and 28 of PBU 4/99 “Accounting statements of an organization,” are separate reporting forms, such as a movement report Money, statement of changes in equity and other forms as part of the financial statements, which are actually considered appendices to the balance sheet and income statement. The explanatory note itself also refers to the explanations as part of the reporting set.
Is an explanatory note required for the balance sheet? Of course, the company must compile it and submit it to the Federal Tax Service as part of its financial statements. However, there is one exception. If the specifics of a company’s activities allow it to have the status of a small business representative, then such a company can prepare financial statements in a simplified form. This involves filing financial statements in only two forms: balance sheet and income statement. A small enterprise will also not have an explanatory note to its financial statements.
How to write an explanatory note correctly: sample
The content of the explanatory note, in cases where it needs to be drawn up, should provide regulatory authorities with information about the company’s activities in the reporting period. It indicates the main characteristics of the business as a whole, as well as factors influencing changes in certain indicators. There is no strict form for an explanatory note. That is, an accountant can compile it in text form and use various tables, summaries, graphs or diagrams in it, in short, use in this report all the methods of presenting information that he deems necessary. The set of data for the explanatory note is also determined by the accountant himself. At the same time, he must be guided by the very purpose of this form, in other words, to disclose in it the information necessary for the controllers to form an understanding of the company’s activities.
Example of an explanatory note
Explanatory note to the balance sheet for 2016 (sample)
Alpha LLC
- General information
- Limited Liability Company "Alfa"
- Legal and actual address: Moscow, st. Profsoyuznaya 99.
- Registration date: August 21, 2013.
- OGRN: 1077077077077
- INN: 7727077700
- Checkpoint: 772701001
- Registered with the Federal Tax Service of Russia No. 27 for Moscow, state registration certificate 77 No. 000000077.
- Authorized capital: 10,000 (ten thousand) rubles, fully paid.
- Main activity: 70.3 - Providing intermediary services related to real estate.
- The number of employees as of December 31, 2016 was 65 people.
- Branches, representative offices and separate units are missing.
- The balance sheet is formed in accordance with the rules in force in the Russian Federation accounting and reporting.
- Accounting policy
The accounting policy for accounting purposes for 2016 was approved by order general director dated December 25, 2015 No. 2015-12/28. IN reporting period accounting policies have not changed.
- According to the approved document, the organization applies linear method depreciation of fixed assets and intangible assets.
- Cost of inventories, finished products carried out at actual cost;
- The write-off of inventories into production is carried out at average cost.
- The financial result from the sale of products, works, services, goods is determined by shipment.
- Key performance indicators (here you can provide the main figures for the company’s income and expenses reflected for accounting purposes)
- In the reporting year, the revenue of Alpha LLC amounted to:
- For the main activity of providing intermediary services related to real estate - 158,456,120 rubles
- For other types of activities – 1,000,580 rubles.
- Other income: 670,800 rubles.
- Costs associated with production and sales:
- Purchase of fixed assets: 3,480,780 rubles
- Depreciation: 44,118 rubles,
- Purchase of materials: 110,880 rubles.
- Payroll fund: 37,520,130 rubles,
- Travel expenses: 458,690 rubles,
- Rent: 5,420,180 rubles.
- Other expenses: 980,456 rubles.
- Explanation of balance sheet items as of December 31, 2016
(Here we decipher individual items of the balance sheet with more detailed information and explanations that may be of interest to auditors. Let us give an example of such an explanation for the line “Capital and reserves”).
4.1. Capital and reserves.
In 2016, the capital ratio and reserves were increased due to part retained earnings previous years, remaining after the payment of dividends to the founders of Alpha LLC based on the results of 2015. Thus, the value of capital and reserves amounted to 880,000 rubles as of December 31.
- Cost estimate net assets(data on net assets calculated on the basis of accounting indicators as of December 31 of the reporting year is provided).
- Composition of fixed assets (the indicator of the corresponding line of the balance sheet is deciphered).
- Accounts payable (including it is advisable to indicate the debt to the budget at the end of the year).
- Other information.
General Director of Alpha LLC Ivanova T.N.
As already mentioned, the legislation does not offer a clear list of information regarding financial activities companies that the accountant would be required to include in the explanatory note to the balance sheet. The main thing when compiling it is to adhere to general principle compliance of financial statements data.
Related parties in the explanatory note
However Special attention When drawing up an explanatory note, attention should be paid to information about related parties. It is recommended to indicate it in this document as a separate section (clause 14 of PBU 11/2008).
The company has the right to determine the list of related parties, the data on which it will reflect in the note. The data itself must be disclosed in the context of information about transactions with related parties, as well as regardless of transactions, for those organizations and individuals that are recognized as affiliated.
Related parties in the explanatory note, example
- Information about affiliated persons as of December 31, 2016:
- Ivanova Tatyana Nikolaevna is the founder of a 50% share of ownership in the management company and holds the position of general director.
- Ekaterina Borisovna Petrova is the founder of a 50% ownership stake in the management company and holds the position of deputy general director.
- Transactions carried out during the reporting period with related parties.
2.1. 03/20/2016 general meeting the founders of Alpha LLC reviewed and approved the financial statements for 2015. The meeting decided to pay a profit in the amount of 7,800,000 rubles to the founders based on their share in the management company based on the results of 2015. The payment (including the withholding of personal income tax) was made on 1504.2016.
2.2. In July 2016, Alpha LLC entered into an agreement with the founder E.B. Petrova. purchase agreement non-residential premises worth 1,250,000 rubles. The cost of the transaction is determined by the independent assessment value of the property, carried out by an independent appraiser. Payments for the completed transaction were made in full in August 2016, at which time the transfer and acceptance certificate for the premises was signed.
An explanatory note is an informational text. Attached to the report, scientific work, project and contains basic information about its purpose, relevance, justification for the feasibility of the work carried out (planned).
Understanding how an explanatory note is written is important for those who work with documents or are engaged in project activities: employees, students, economists, lawyers.
The style of presentation of information material is businesslike. Clearly, concisely, using professional terminology, standard phrases and phrases (due to the current circumstances, in in the prescribed manner, the analysis showed), stereotypical sentences, without personal pronouns. Formally and objectively, without personal assessment of the story.
For scientific work, the project is updated: the purpose of its creation, significance. To the technical project – specifications, application area.
In addition, the description of the technical project contains information about functional purpose system, object. Its components and the relationships established between them, features of interaction. The process of activity is described and technical solutions, how to put the system into operation, features of development and application.
When preparing a note to a draft law or order, it is indicated legal framework, sections and subsections, the feasibility of its implementation. The procedure for its adoption, publication in the media, terms of entry into force. Basic provisions, principles on which it is based.
General requirements for compilation
Depending on the field of activity, there may be specific features. Every department and organization has a . IN educational institutions Manuals are being developed that explain the requirements for form and content.
Standard design:
- in printed form, on A4 paper, portrait orientation, on one side
- font Times New Roman, size 12, one and a half spacing
- Items and sections, lists are highlighted in bold, printed in the center of the sheet
- Page numbering is required title page not marked
- conclusions after each point and section
- It is possible to attach additional material in the form of tables, diagrams, diagrams
- break the text into paragraphs (sets the overall structure and ease of reading)
Registration according to GOST
Overall the form is the same. The differences relate to the specifics of its field of application and individual requirements imposed by the customer. Some items are excluded depending on the destination.
Structure:
- introduction
- annotation
- reductions and symbols with their decoding
- content
- conclusions (for scientific projects)
- bibliography
- application
The title page indicates the full name of the author (or data of the organization on behalf of which it is being prepared), below the addressee (to whom it is sent - executive or institution), then the “Explanatory Note” is printed in large letters, the name, for example “Water Protection Zone”, the date of compilation and registration number (for formal documents), signature and position of the compiler.
Introduction is relevance. Goals, objectives, general information about the organization and its activities (for economists). Relevant to today. There may be a brief description of previous experience and historical reference, which confirms the relevance of the research being carried out, .
Abstract – a brief summary, the most basic. Sections, subsections and paragraphs are indicated. Their description. The issues they address are the concepts.
Conclusions – results of the project implementation, results of the work performed (for reporting documentation). For financial statements, it may be necessary to indicate discrepancies in accounting and explain them (if the request is initiated by the tax authorities). compliance with the set goals, losses incurred.
Abbreviations and symbols are often indicated in scientific works. For example, a diploma project, coursework. Repeating phrases and words, their abbreviations and designations are indicated here. Further in the text they are already used in abbreviated form.
A bibliography is a list of literature sources (scientific works, monographs, printed and periodicals, dictionaries). There are strict requirements for their description, which are established in accordance with common standards. You can familiarize yourself with them in special manuals by contacting the institution’s library.
Appendix – if necessary, attach diagrams, graphs, diagrams, drawings, illustrations. This item is optional. It depends on the nature of the work. The attached materials serve for clarity and allow you to clarify certain provisions in the presented material.
Explanatory note to the Tax Service
Order No. 43n dated July 6, 1999 of the Ministry of Finance Russian Federation regulates the delivery procedure. According to the document, an explanatory note is being prepared. It contains information about the financial activities of the institution.
To the reporting data.
The main purpose of drawing up an explanatory note is to decipher the financial statements, in particular the balance sheet (Form 1). A well-written explanatory note will place inspectors in favor of your company, make it much easier to submit your balance sheet, and reduce the likelihood of an extraordinary tax audit.
Who doesn't provide an explanatory note?
No obligation to draw up a document non-profit organizations and associations that lack commercial activity. However, if in some period they did receive profit from any side activities, they will have to provide an explanatory note. An example of such an activity would be the sale of retired equipment. If it was simply written off, it will not be considered commercial turnover.
Individual entrepreneurs may not bother themselves with drawing up an explanatory note. In addition, they do not represent a balance sheet at all. Enterprises that are on a simplified taxation system draw up a document in a simplified version.
It is worth remembering that if something important or significant happened to the company over the past year - the type of activity changed, a large long-term loan was received, a natural disaster caused significant damage, then these events must be reflected in the explanatory note.
How to write an explanatory note correctly?
The form of the document is not regulated, that is, each taxpayer draws it up at his own discretion. However, PBUs have strict requirements for what should be contained in the explanatory note.
The document must include:
Brief summary about current activities companies.
Any qualitative changes in property or finances (a large loan was taken out, a large block of shares in another company was acquired) that affected the performance of the enterprise - this also needs to be reflected. It is also worth explaining the reasons for what happened (market expansion, need for additional financing).
Factors that greatly influenced the change financial condition companies.
Management decisions made based on the results of the reporting period.
Changes that have occurred in the system of distribution of financial results.
Main sections of the explanatory note
General information
Tell us about your company: form of ownership, name, number, management system and founders. If licenses have been obtained, please indicate which ones and in which areas. At the end of the section it is worth providing data on taxes paid for the period.
Accounting changes
Here are all the changes in accounting policy. This section is worth filling out if you have established a non-standard calculation scheme for any indicator. You also need to justify why your diagram more accurately reflects the state of the company.
Assets and Liabilities
In this section it is worth describing each block in detail - by fixed assets, intangible assets, inventories, loans and credits, currency obligations.
For assets such as fixed assets and intangible assets, be sure to disclose depreciation and writedown information. For loans, it is worth describing the terms of their repayment and the operating expenses incurred on them. For foreign currency liabilities – exchange rate differences based on financial results.
Balance sheet structure and profit dynamics
Here, show your solvency – for the present time and for the near future. It would be appropriate to calculate liquidity ratios and financial stability, as well as profitability.
Income and expenses
The purpose of this section is to show in detail your financial flows. Describe sales volumes (preferably in detail and in several sections - by type of product, by region), production costs, various distribution costs, and the amount of financial reserves.
Business activity
Describe your performance business activity– geography of sales, degree of implementation of plans, efficiency of use of own resources. If you have experienced a decline in any area, indicate the reasons for it.
Opening balances
Indicate their magnitude and the reasons for the changes (reorganization, changes in the accounting law).
Affiliates
These are companies and individuals that are dependent on you or control your company. These include your subsidiaries, parent organization, founders, and shareholders. List them all, describe what business relationships you have.
Conditional facts of economic activity
This includes cases that have not yet been resolved and obligations that have not yet been established. For example, if you are conducting a lawsuit about causing damage to a client, then the amount of compensation is not yet an established fact, conditional. Or there are warranties for your products. Describe such facts, the reasons for their uncertainty, and the amount of money reserved for them.
Cooperative activity
Such activities include operations under simple partnership agreements. List the types and total number of such contracts, the amount of turnover for such transactions and financial results on them.
Branches and divisions
If your company has branches, list them and give general summary indicators for them. As a result, indicate the total share of divisions in your total net profit.
Budget assistance
Perhaps your company received a budget loan or financing? Describe the amount and nature of funds received.
Information about promotions
If your company is Joint-Stock Company, then in this section it is worth describing the number of shares issued, the extent of their payment (partially, fully), the size of the block of shares owned by your company. If you had an additional emission, tell us about its reasons and size.
Tax assets
This section is governed by the provisions of PBU 18/02. Reflect in it the changes in conditional income and income tax expenses, tell us about the resulting permanent and temporary differences, tax losses, deferred assets.
Discontinued operations
If your company ceases any type of activity or activity in any area, write about the reasons and amounts of disposed assets and liabilities. Uncover financial flows by this species activities and how their liquidation will affect the overall condition of the company.
Other indicators
Here, summarize, show the feasibility of the company’s existence, its usefulness.
Your explanatory note does not necessarily have to contain all of these sections. Write about what happened specifically to your company. The most detailed and understandable explanatory note will remove all unnecessary questions from your tax inspector!
You can download a sample explanatory note below
Download a sample explanatory note to the balance sheet for freeAll forms
- explanatory note_sample.doc
For all received tax returns and calculations, the Federal Tax Service Inspectorate conducts a desk audit, during which it may request from the taxpayer the necessary explanations on the reports provided (clause 3 of Article 88 of the Tax Code of the Russian Federation). We will talk about the reasons for such tax requests, how an explanatory note is drawn up to the tax office upon request, and we will also provide a sample of the explanations in this article.
When the tax office asks for clarification
Reasons why tax officials may have questions for the taxpayer during the process desk audit, are listed in paragraph 3 of Art. 88 Tax Code RF:
- Reason 1 - the camera revealed errors in the reporting or contradictions between the reporting data and the information available to the tax authorities.
What the Federal Tax Service will require is to provide clarifications or make corrections to the reporting.
- Reason 2 – the taxpayer submitted a “clarification” in which the amount of tax payable, compared to the previously submitted report, became less.
What the Federal Tax Service will require is to provide explanations justifying the change in indicators and the reduction in the amount of tax payable.
- Reason 3 – unprofitable indicators are stated in the reporting.
What the Federal Tax Service will require is to provide explanations justifying the amount of the loss received.
Having received a similar request from tax authorities to provide an explanation to the tax office (a sample can be seen below), it should be answered within 5 business days. There are no penalties for failure to submit, but you should not ignore the tax authorities’ requirements, since, without receiving a response, the Federal Tax Service may assess additional taxes and penalties.
Please note: if the taxpayer falls into the category of those who are required to file tax return V in electronic format according to paragraph 3 of Art. 80 of the Tax Code of the Russian Federation (for example, on VAT), then he must ensure the acceptance from the Federal Tax Service of electronic documents sent during the desk audit. This also applies to requests for explanations - within 6 days from the date of sending by tax authorities, the taxpayer sends an electronic receipt to the Federal Tax Service Inspectorate confirming receipt of such a request (clause 5.1 of Article 23 of the Tax Code of the Russian Federation). If you do not confirm receipt of the electronic request, you may be blocked. bank accounts taxpayer (clause 3 of article 76 of the Tax Code of the Russian Federation).
How to write explanations to the tax office
There is no officially approved sample explanatory letter sent in response to the Federal Tax Service's request for clarification. Explanations can be made in any form, indicating the following information:
- Name tax authority and the taxpayer, his INN/KPP, OGRN, address, telephone;
- heading "Explanations";
- obligatory reference to the outgoing number and date of request from tax office,
- direct explanations on the requested issue with their justification,
- if necessary, list attachments to the letter confirming the correctness of the reporting indicators,
- manager's signature.
If an error made in reporting did not lead to an understatement of tax, the explanatory note to the tax office must contain this information. Write about this, indicating the nature of the error (for example, a typo or technical error) and the correct value, or provide an updated declaration or calculation. An error due to which the tax amount was underestimated can be corrected only by submitting a “clarification” - explanations alone will not be enough for tax authorities in this case.
When, in the taxpayer’s opinion, there are no errors in the reporting, and therefore there is no need to submit an “adjustment”, it is still necessary to provide explanations to the tax authorities, indicating the absence of errors in the declaration or calculation.
Letter of explanation to the tax office: sample for losses
Taxpayers may be interested in the company's unprofitable activities, in which case the taxpayer's explanations must fully disclose the reason for the loss in the requested reporting period. To do this, the letter deciphers income and expenses for a certain period of time.
Also, explanations to the tax office (see sample below) must contain instructions on why expenses exceeded income. For example, a company has just been established, operations have just begun and revenue is still small, but current expenses are already significant (rent, employee salaries, advertising, etc.), or the company has incurred urgent large expenses for repairs, purchase of equipment, etc. The more detailed the reasons for the loss are, the fewer new questions the tax authorities will have.
All information provided must be documented by attaching a written explanation to the tax copy. accounting documents, contracts, invoices, bank statements, tax registers, etc.
Similarly, explanations can be given in response to a request for reasons for reducing the tax burden, in comparison with the industry average.
Sample letter to the tax office to provide explanations in connection with a loss:
Explanatory note to the tax office: sample for VAT
Since January 24, 2017, the Federal Tax Service order dated December 16, 2016 No. ММВ-7-15/682 on approval of the format of explanations to the VAT return in electronic form has been in force. This format is used by all VAT payers filing electronic reporting. The procedure for a taxpayer's actions upon receipt of a request to provide explanations on the VAT return is described in detail in the letter of the Federal Tax Service of the Russian Federation dated November 6, 2015 No. ED-4-15/19395.
How to write an explanatory note to the tax office regarding VAT? Only electronically. Explanations for VAT submitted in “paper” form are not considered submitted, and in this case this may be regarded by tax authorities as an unlawful failure to provide the requested information, which could result in a fine of 5,000 rubles (Clause 1 of Article 129.1 of the Tax Code of the Russian Federation).
Whatever the request from the tax inspectorate: about detected errors, contradictions between reporting forms, about a reduction in the amount of tax in an updated declaration, or about the reasons for the loss, in any case it is necessary to respond to the request. For reporting submitted exclusively via telecommunication channels, an electronic format for submitting explanations is provided at the request of tax authorities.
