Accounting Principles Used by Companies & SEC: Different Results - Research Paper

Introduction

The methods of accounting principles that are used by a company and security exchange commission may not be the same, and this means that the financial statements that they portray are expected to be different. The application of various principles tends to have material effects on the figures recorded in the books of accounts and it can be noted that these differences have been noted and explained in the report. Their similarity is noted in a significant number of figures when then financial principles used in both cases are the same. The statements that are provided to the security exchange body have detailed information that is not directly reflected in the statement of financial position that is on the firm's website. It can be stated that Apple Inc. has prepared two sets of financial statements, one for the security exchange and the other for shareholders (U.S. Securities and Exchange Commission, 2019). The 10-k form provided is governed by federal statutes, and it contains detailed information compared to the statements in the entity's website (Investor Relation, 2019). The company's officers have managed to give explanations to specific questions on the operations undertaken by the company, and these details are missing in the documents that shareholders manage to access from the company's website.

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It can be noted that Apple Inc. is at liberty to decide the information to give its stockholders. Another notable difference between the two sets of financial statements is the inclusion of Form 3 and 4. Form 3 is a statement that contains information on the beneficial ownership of the securities in Apple Inc. while changes in such ownerships are stated in Form 4.

As an investor, I would be concerned with the notes to the financial statements, for they can offer information to clarify various points concerning a company. The information that I will need to consider should provide additional information on references used by the firm, the policies used in preparing the financial statements, the various disclosures, or any adjustments that have been made on the figures given in the books of account. The organization may need to offer a lot of details that may not fit in the statement, and this is why the notes to accounting books may be needed.

I will need to understand the methodology utilized in preparing the various accounting information. The move will ensure that I manage to understand whether the methodologies used have made any changes to previous practices. I will manage to know the procedure followed in preparing the earnings per share, for this will provide details on Apple's Inc. ability to raising profits and the possible amount that the stockholders will get from the shares that they hold. I will be interested in knowing the procedure the firm used to determine future financial income, depreciation, any upcoming new products, diluted, and outstanding shares.

The financial statements for the fiscal period 2019 show that Apple Inc. is an organization that can I can invest and stand to gain huge returns in the future. The organization managed to record $206 billion in investments and cash as of September 2019, and these would be the funds that stockholders would get through dividends and stock buybacks. The dividend yield ratio has been on an upward trend over the years, and this is an indication that there is a guarantee of future payments, and the figure is likely to be higher than the current value. Apple Company has a strong financial position, and this can be shown in the balance sheet, meaning that it has a huge potential for growth.

References

Investor Relation. (2019). News and Results. Retrieved from https://investor.apple.com/investor-relations/default.aspx

U.S. Securities and Exchange Commission. (2019). Apple Inc. Retrieved from https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000320193&owner=exclude&count=40&hidefilings=0