Not all the relevant financial information about a company"s financial position and activities are in the body of the financial statements. Many issues may instead be disclosed in accompanying notes to the financial statements. Fair value and risk of financial instruments. Informs external users about the company"s accounting policies, practices, and methods. Includes principles relating to revenue recognition and asset allocation, particularly when these principles and methods are. Peculiar to the industry in which the company operates. Financial instruments include items such as stocks, bonds, and notes payable and receivable as well as more exotic instruments. U. s. gaap requires disclosure in the notes the fair values of all financial instruments, whether or not they are measured at fair value on its balance sheet. A company is also required to disclose all significant concentrations of credit risk due to its financial instruments. Gaap requires disclosure of the fair value of all derivative financial instruments on its balance sheet.