The notes to financial statements is a document to be prepared by management. It is one of the components of annual financial statements, along with a balance sheet and an income statement. Its purpose is to present supplementary information for the reader of financial statements that cannot be read from a balance sheet or income statement. Thus, the notes to financial statements not only present general information provided by management on financial statements, but also the accounting policies applied during the financial year, which provide information on the exercise of options. In addition, certain items of a balance sheet and income statement are required by law and are listed and explained in the notes. In Germany, the notes to financial statements must be prepared by corporations and GmbH & Co. KG.
