The Annex to the Annual Financial Statements in the Context of the European Directives

• Author: Ovidia Doinea
• Position: University of Craiova, The Faculty of Economy and Business Administration Drobeta Turnu Severin
• Pages: 503-505

The Annex to the Annual Financial Statements in the Context of the

European Directives

Ovidia Doinea1

1University of Craiova, The Faculty of Economy and Business Administration

Drobeta Turnu Severin, ovidia.doinea@yahoo.com

Abstract. The ann ex is a constitutive part of the annual accounts, being a conceptual product mentioned in

the art.2 of the CE E 4th Directive. This synthetic accounting document has the role to explain or to complete

the element given by the balance sheet and the profit and lo ss account. The annex represents a valuable

instrument of infor ming and analysis for all the users of accounting information. The informative dimension

of the an nex is not limited, but the information presentation must respect the principle of true and fair view

and that of the significant importance.

Keywords: annex, annual accounts, true and fair view, Notes, synthetic accounting documents

A dimension of international accounting standardization is the process of accounting harmonization

taking place within the European Union.

This process, initiated in the `70, targets especially the harmonization of the member states’

accounting systems, in this sense being elaborated directives that must be incorporated in the national

legislation of each of the member states.

The 4th Directive has the specific objective of solving the differences regarding the structure and

format of the annual synthetic documents in the conditions in which more options that might be

reiterated by the national accounting norms are stipulated.

This directive, as document, is made out of 61 articles, grouped in 12 sections, from which Section

nr.8, titled ”Notes to the annual accounts”, mentions the minimal information the annex must give as

the synthetic accounting document.

The globalization and the insufficiency of the information given by the balance sheet and the profit

and loss account do not permit the achievement of the enterprise’s true and fair view of the patrimony,

financial situation and result. For this reason the existence of the annex as synthetic accounting

document is an informational necessity.

The position of the annex within the assembly of the synthetic documents has generated many

opinions in the specialized literature.

For some authors, „the annex is a constitutive part of the financial statements”1, for others, the

annex represents an analytical approach in the conditions in which the balance sheet and the

profit and loss account represent authentic synthetic documents.

But, we subscribe to the opinion that considers “The annex is a conceptual product, its presence

being the consequence of the putting in practice of the accounting principles, especially the

principle of the true and fair view and the principle of the significant importance (or the

significance threshold)”2.

The elaboration of an annex of quality means to select the information of significant importance either

for explaining or completing the elements offered by the balance sheet and the profit and loss

account.

Within the financial statements assembly, as the opinion unanimously accepted by the specialized

literature states that the annex has a double role:

1 Ristea m., Olimid L., Calu D.A. – Sisteme contabile comparate, Editura CECCAR, Bucureşti, 2006.

2 Doinea O. – Situaţii financiare anuale- teorie şi metodologie naţională, Editura Universitaria, Craiova, 2005.

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