Notes to Accounts are the notes forming part of your financial statements. Each note is the drill-down of one Balance Sheet or Profit & Loss line, built from the same ledger accounts, so a note always equals the line it explains. SmartLedger fills in the figures for you. Your job is to review them, add the narrative and disclosures, and post any finalisation adjustments.
Set up the view
- Go to Accounting → Notes to Accounts.
- Under Reporting format, choose Company (Schedule III) or Non-Corporate (ICAI NCE).
- The page opens on the format that fits your company's constitution. Schedule III applies to private, public and one-person companies. The ICAI non-corporate format applies to proprietorships, partnership firms, LLPs, AOPs and trusts. A warning appears if the format you pick doesn't match your company.
- Under Financial year, choose the year. Each note compares it with the year before.
Work through the notes
- Pick a note from the Notes list on the left.
- Notes marked Auto take their figures from your books. Notes marked Text are narrative notes you write. A tick marks a note you've already reviewed.
- Check the figures.
- Each ledger account under Particulars is shown for both years, with Total (as per financial statements) at the bottom. Click the open icon at the end of an account's row to see its ledger.
- For a text note, write the narrative in the editor. It's saved when you move to another note or leave the page.
- Fill in any disclosure fields the note asks for.
- Click Save & Mark Reviewed.
- The count at the bottom of the page shows how many notes are reviewed. Click Undo on a reviewed note to reopen it.
You can also open a note from the Balance Sheet or Profit & Loss report by clicking its note number.
Post an adjustment entry
When a figure needs a finalisation adjustment, such as a reclassification, provision or depreciation, post it from the note so the ledger, the statement line and the note move together.
- In the note's Adjustment entries section, click Add adjustment entry.
- Choose the Adjustment type, the Journal and the Date.
- Enter the lines, choosing an account and a Debit or Credit for each. Click Add line for more.
- Add a narration.
- Click Post adjustment.
The adjustment is posted as a journal entry and listed under the note. Click it to open the journal entry.
Nil notes
A note with nothing to report in either year is treated as nil and hidden. To leave out a note yourself, click Mark as Nil and confirm. The notes after it, and the note numbers on the Balance Sheet and P&L, renumber to match. Tick Show nil notes in the list to see hidden notes, and click Restore note to bring one back.
Tips
- Click Preview to read the notes in order as they'll appear.
- If a year shows no ledger balances, nothing has been posted for it yet. Pick another year, or post your entries first.
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