Accounting Policies - Paper

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Accounting Policies

Within the financial statements there is a section that discloses the accounting policies used by the company for the financial year. The purpose of this will be discussed in this assignment while being applied to Morrison’s final accounts. The IASB will also be discussed; the discussion will include legislation which will show the legal requirements that the company has to keep to. It will then go on to explain why they may use those policies and who do they disclose them onto the financial statements for i.e. stakeholders. Accounting policies can be very important to stakeholders for multiple reasons which will be discussed below. The Accounting policies section of the financial statements are there
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So they use these policies so that people or entities interested their financial position, know where and how the figures are arrived at and on what basis.

Policies in general not just for WM Morrison’s, are there to help stakeholders realise what the figures are based on so they can make judgments be them to invest or just out of general interest in that company. This is very important as without these people may make bad judgments and may be misleaded into losing their property or may lead others into investing when they may be making decision based on misleading information given by the company. So when deciding if they want t risk their money by investing they may want to know the value of a company so they can see if they are safer to invest in a bigger company however if a company does not state their policies they may have for example a lot of unjustified goodwill and without a professional to help they may think the company is worth a lot more than they actually are. Again for example a company’s stock may be calculated in an inappropriate way so to make their stock seem higher so their net current assets seem to be a lot healthier than they actually are. They
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