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 for many reasons including shareholder information, legislation and for many other stakeholders which would take interest in what policies the company use and what the financial information is based on. Although Morrison’s have two sections for accounting policies in their annual report, only one will be discussed as one is for the group and the other solely for the company. The accounting policy section for the whole group of Morrison’s plc will be discussed below as it may portray a fairer view of the financial position of the company.
Morrison’s and their Policies
Morrison’s is large supermarket group which operate in the UK, they have over 403 stores in the UK. Their annual turnover was in excess of £14 billion and they currently employ over 124 000 employees [WM Morrison’s Annual Report, 2009] Morrison’s have many accounting policies stated in their Annual Report these accounting policies will only be stated as there are many descriptions. The accounting policies include Revenue Recognition, Other Operating Income, Segmental Reporting, Cost of Sales, Supplier Income, Property Transactions, Borrowing Costs, Deferred and Current Tax, Business Combinations and Goodwill, Property Plant and Equipment, Investment Property,
References: [WM Morrison’s PLC, Annual Report and Financial Statements, 2009]