Question

What is the purpose of disclosing significant accounting policies in the preparation of financial

statements and how does it affect past performances and present position of a company?​

Answer 1

Answer:

The policy summary is mandated by the applicable accounting framework (such as GAAP or IFRS). These frameworks require an organization to disclose its most important policies, the appropriateness of those policies, and how they impact the reported financial position of the firm.

The main principle and purpose of disclosure of accounting policies are to disclose any affair or event that influenced any financial statements. The business incorporates a legal system, and, for most legal systems, it is a requirement in most countries to disclose its policies and notices.