Disclosure Practice and Perspectives of Notes to Financial Statements in Croatian Tourism Companies

Companies all over the world present their financial information in the financial statements. Notes to the financial statements are one of the principal financial statements and represent a valuable source of information for investors and other interested groups. Disclosure requirements for financial statements prepared under the International Financial Reporting Standards are set by the International Accounting Standards Board. According to the International Accounting Standard 1 Presentation of financial statements, the entities should disclose financial information either in the primary financial statements or in the notes to financial statements. Often, the preparers are not aware that they should make decision which information is significant and should be presented in detail and in doing this they need to exercise judgments. The practice has shown that over the time the notes has become very extensive. As a result, the process of finding relevant information has become very challenging for many financial statements users. In order to solve that problem, the International Accounting Standard Board published in March 2017 a Discussion Paper Disclosure-Initiative Principles of Disclosure to call for a discussion on the problems of the disclosure. The paper deals with theoretical discussion on actual problems arising from the disclosure of the notes to financial statements and the analysis of the notes in Croatian tourism companies has been done in order to examine actual disclosure practice in the companies. Finally, the perspectives of the notes disclosures are presented in the paper.