INFLUENCE ELEMENTS IN ACCOUNTING POLICIES ON THE FINANCIAL RESULTS OF THE COMPANY
Journal Title: Економіка: реалії часу - Year 2016, Vol 1, Issue 23
Abstract
Many companies underestimate the importance of accounting policy, treating it formally, so do not foresee the consequences that lead to inefficient management. Businesses give the opportunity under the current legislation to form accounting policies, but often no recommendations for keeping certain facts of economic life, as the company is compelled to refine it themselves with the peculiarities of the company, avoiding mistakes that can lead to lower profits. The purpose of the essay is to examine issues related to the impact of accounting policy on the financial results of the company. To achieve this goal were we have underlined the elements that carry the greatest impact on financial results (choice materiality threshold, the method of depreciation, reserve estimation method of disposal, the method of calculation of transport and procurement costs, the choice of method for the measurement of the allowance for doubtful debts, the method of calculation). We discussed existing methods of elements of the accounting policies, set out their strengths and weaknesses, and set the most optimal ones. All the conventions that arise in the course of determining the financial performance of the companies follow with the accounting policies selected, especially for issues such as materiality threshold selection, the method of depreciation (it turned out the use of accelerated depreciation methods affects the increase Сcl, Сowc, capital productivity, Сgs and reduce Рsales, Рoe, Рassets, Рwc, NA), evaluation method of disposal of stocks (if the company used FIFO method then increase Сcl, Рops, Рoe, NA, and reduced Cgs, Сr. me.), the method of choice for the measurement of the allowance for doubtful debts and so on. In the current crisis for entrepreneurs seeking a high level of need to pay more attention to issues of impact elements of accounting policy on the financial results of the company. Therefore, they should pay attention to the research conducted by us.
Authors and Affiliations
Anna Smokvyna, Svetlana Kavierina, Kseniia Lihanenko
Keywords
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