A document or a note (typically, an explanatory note) that is created to ensure that transactions or notes pertaining to unforeseen or unexpected activities/ occurrences are explained or clarified alongside the financial statements so that the users of an entity’s financial statements have a complete picture about its state of affairs.

A memorandum contains the so-called memorandum information: the information that is provided alongside an entity’s financial statements or general ledger entries as a certain explanation or clarification for specific transactions, particularly those that require specific adjustment to account for unforeseen or unexpected activities or occurrences over the course of a reporting period. Memorandum information help present all relevant disclosures, including those relating to necessary amendments reflecting such activities and occurrences. These amendments are usually made to an entity’s books and financials, so that its financial reporting meets the accounting requirements for full disclosure.