THEORETICAL ANALYSIS OF ACCOUNTING POLITIC'S METHODS AND THEIR IMPACT TO COMPANIES' BOOK VALUE

Abstract

Investors make extensive use of information about the company’s market value and accounting value to determine company’s worth. Balance sheet information is used to determine the accounting value, which is affected by one of the internal factors - accounting policy. Therefore, the aim of this theoretical study is to reveal the relationship between the company's accounting policy and the company's accounting value to define at a theoretical level the impact of certain methods chosen in the accounting policy on the company's performance and accounting value. Using the methods of analysis and synthesis of scientific literature, two directions of accounting policy have been distinguished - profit-increasing and profit-reducing accounting policy. Analyzing the results of previous research using the method of secondary data analysis, the relationship between the accounting policies for assets and liabilities and the effect of increasing or decreasing accounting policies and the impact on the company's accounting value has been established. The choice of inventories and methods of accounting for property, resource stocks, equipment, grants, and provisions has been found to have the most significant impact on the results of operations and the carrying amount of the Company. The results of the study are presented by the descriptive method.