Ill. Admin. Code tit. 11 § 412.40

Current through Register Vol. 48, No. 45, November 8, 2024

Section 412.40 - General Notes to Financial Statements

The following notes shall be included in each application filed. This information may be set forth on the face of the application statement, in a supporting schedule or in notes appropriately captioned.

a) Summary of significant accounting policies.

1) Principles of consolidation including accounting for investments in subsidiaries not consolidated. A brief description of the principles followed in consolidating the separate financials. If there has been a change in the entities included or excluded from the previous fiscal year, state the entities and the effect.

2) Depreciation and amortization methods. State the policy followed in computing the provision for depreciation of physical property and leasehold improvements, including the method and rates used.

3) Pension and retirement plan accounting. State a brief description of the essential provisions of the plan and the related accounting and funding policies, including the cost of the plan for the year. Also state whether or not the plan has been submitted to and/or approved by the Internal Revenue Service.

4) Recognition and deferral of income taxes.

A) The following components of income tax expense shall be disclosed in the income statement or a note thereto:

i) taxes currently payable,

ii) tax effects of timing differences, and

iii) tax effects of operating losses and the net deferred investment tax credits.

B) Include a brief description of the nature of such timing differences. Include a brief statement as to the policy for accounting for investment credit.

5) Amortization of intangible assets. Include a brief statement as to the policy and method of amortization.

6) Intercompany profits and losses. Include a brief description as to the amounts and the policy for the accounting for intercompany items.

7) Deferred charges and credits. State the nature and the write-off period of any significant deferred charges.

8) Any other accounting policies that materially affect the determination of financial position, results of operation and changes in financial position.

b) Assets subject to lien. Briefly identify assets mortgaged, pledged or in any other way subject to lien.

c) Defaults. Briefly describe the nature and effect of any defaults of security agreements, indentures and loan agreements.

d) Restrictions on retained earnings. Briefly describe and give the amount of the most restrictive of any such restrictions.

e) Commitments and contingent liabilities. Disclose the amounts and nature of any significant commitments and contingent liabilities.

f) Capital stock. Describe the pertinent facts regarding any stock options, warrants or rights outstanding.

g) Any other footnotes essential to an understanding of the financial statements.

Ill. Admin. Code tit. 11, § 412.40