Accounting Policies
Barron's Accounting Dictionary:
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Accounting Policies
Reporting methods, measurement systems, and disclosures used by a specific company. The accountant should evaluate the appropriateness of accounting policies employed by management.
A description of the company's accounting policies should be presented in a separate section preceding the footnotes to the financial statements or as the first footnote. Disclosure of accounting policies should include accounting principles and methods of application that involve: (1) a selection from generally accepted alternatives; (2) those peculiar to the industry or field of endeavor; and (3) unusual or different applications of GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).
Examples of disclosures are basis of consolidation , depreciation methods, and inventory pricing. Disclosure of accounting policies assists financial readers in better interpreting a company's financial statements.
Thus it results in fair presentation of the financial statements.
A description of the company's accounting policies should be presented in a separate section preceding the footnotes to the financial statements or as the first footnote. Disclosure of accounting policies should include accounting principles and methods of application that involve: (1) a selection from generally accepted alternatives; (2) those peculiar to the industry or field of endeavor; and (3) unusual or different applications of GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).
Examples of disclosures are basis of consolidation , depreciation methods, and inventory pricing. Disclosure of accounting policies assists financial readers in better interpreting a company's financial statements.
Thus it results in fair presentation of the financial statements.
| Accounting Period, Accounting Measurement, Accounting Manual | |
| Accounting Postulate, Accounting Practice, Accounting Principles |
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Accounting Policies
Investopedia Financial Dictionary:
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Accounting Policies
The specific policies and procedures used by a company to prepare its financial statements. These include any methods, measurement systems and procedures for presenting disclosures. Accounting policies differ from accounting principles in that the principles are the rules and the policies are a company's way of adhering to the rules.
Investopedia Says:
Accounting principles are lenient at times, so the policies of a company can be very important. Looking into a specific company's accounting policies can signal whether management is conservative or aggressive when reporting earnings. This should be taken into account by investors when reviewing earnings reports. Also, outside accountants that are hired to review a company's financial statements should check the company's policies to ensure they conform to accounting principles.
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Barron's Accounting Dictionary
Dictionary of Accounting Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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Mentioned in
Internal Audit
(business term)
Nonprofit Accounting
(business term)
Accounting Practice
(in accounting)
Footnote
(in accounting)
Letter of Recommendation
(in accounting)
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