Preparing IFRS Notes the right way: Requirements, processes, and solutions

Preparing IFRS Notes is a key component of the annual financial statements for many companies. These disclosures, required under International Financial Reporting Standards (IFRS), provide essential explanations and details that give context to the financial figures — ensuring transparency for investors, regulators, and other stakeholders. At the same time, they present a significant challenge: complex requirements, large volumes of data, and the need for audit-proof documentation demand efficient processes and modern solutions.

In this article, we outline what IFRS Notes are, how they are structured, the challenges companies face in preparing them, how to set up a successful process, and how digitalization can help reduce effort while improving quality.

What are IFRS notes and why do they matter?

IFRS Notes — also known as IFRS disclosures — are supplementary information published alongside a company’s financial statements. They form part of the consolidated financial statements under IFRS and provide detailed explanations of the balance sheet, income statement, and other key reporting items.

They are crucial for interpreting and fully understanding the figures presented in the primary statements. Notes disclose accounting policies and valuation methods, highlight risks, contingencies, and critical estimates, thereby enhancing both transparency and credibility.

The legal foundation is primarily set out in IAS 1 (Presentation of Financial Statements), IFRS 7 (Financial Instruments), and other specific IFRS standards. The exact scope and structure, however, vary by industry, size, and business model.

Structure and content of IFRS notes

The structure of IFRS Notes typically follows a clear framework that explains the different aspects of the financial statements:

• Accounting policies and measurement methods: principles applied, e.g., asset valuation or provisions
• Explanations of balance sheet items: details on key positions such as receivables, liabilities, inventories
• Financial risks: disclosures on market risks, credit risks, and risk management
• Estimates and assumptions: uncertainties in estimates that could impact the statements
• Contingent liabilities and commitments: potential future obligations
• Other disclosures: information on related parties, segment reporting, or significant post-balance sheet events

While standardized, the structure is adapted to each company’s specifics. A complete, well-structured set of notes ensures both traceability and regulatory compliance.

Key challenges in preparing IFRS notes

Preparing IFRS Notes is often a resource-intensive process, with challenges that can increase workload and risk. Common issues include:

• Data volume and complexity: data comes from multiple systems and departments; manual consolidation often leads to errors
• Compliance and timeliness: disclosure requirements are extensive and frequently updated through new standards or legislation
• Traceability and audit-readiness: auditors require transparent, well-documented information
• Coordination and workflow: finance, controlling, legal, and external auditors need seamless collaboration

How to prepare IFRS notes effectively – a 7-step process

Getting IFRS Notes right is essential for compliance and for making financial reports meaningful and transparent. A systematic approach helps reduce errors and effort. Here’s a seven-step process to improve quality, ensure compliance, and ease the workload for all teams involved:

Step 1: Understand the requirements

Familiarize yourself with the IFRS standards relevant to your business. Pay special attention to mandatory disclosures and industry-specific rules. A clear checklist defines the scope of the notes.
 

Step 2: Plan structure and outline

Establish a consistent structure that meets regulatory requirements and stakeholder needs. Use proven templates to ensure clarity and comparability.
 

Step 3: Collect and validate data

Gather information from all relevant systems and departments — finance, controlling, legal, risk management. Ensure completeness, accuracy, and consistency, and validate systematically.
 

Step 4: Draft precise and clear content

Formulate disclosures in a way that is clear, concise, and technically correct. Avoid redundancy, but include enough detail for full understanding.
 

Step 5: Enable cross-functional collaboration

Involve all stakeholders early to integrate diverse perspectives and smooth coordination. Regular reviews prevent late-stage misunderstandings.
 

Step 6: Ensure audit-readiness

Document sources, assumptions, and calculation methods thoroughly. Use checklists and version control to simplify audits.
 

Step 7: Leverage digital tools for efficiency

Use specialized software that automates processes, enables collaboration, and ensures audit-proof documentation. Digital platforms reduce manual errors and save time.

Digitalization and automation of IFRS notes

Modern software solutions like Envoria provide comprehensive features that streamline and automate IFRS Notes preparation:

• Data integration: automated import and consolidation of financial and master data from multiple systems

• Templates and standardization: ready-to-use templates for the most common IFRS requirements, customizable to company specifics
• Collaborative workflows: centralized platform for interdepartmental collaboration with version control and full traceability
• Audit-ready documentation: logging of all data changes and sources for reliable audit trails
• Easy export options: reports can be exported directly into Word, Excel, or XBRL formats, simplifying reporting to regulators and investors

By using digital tools, companies can save time, reduce errors, and ensure compliance — key factors for a smooth year-end closing.

Better IFRS notes with structure and technology

Preparing IFRS Notes is a demanding but indispensable task that adds significant value to the transparency and reliability of financial reporting. The wide-ranging requirements and extensive data make a systematic, structured process essential.

Digital solutions like Envoria help companies manage this complexity effectively. Automated workflows, centralized data integration, and audit-proof documentation not only improve the quality and consistency of disclosures but also significantly reduce time and resource demands.

In this way, compliance with IFRS requirements becomes more than a legal necessity — it becomes a competitive advantage through better data quality, greater transparency, and stronger investor and auditor trust.