Sainsburys Supermarkets Essay Example | Topics and Well Written Essays - 2500 words

Sainsburys Supermarkets - Essay ExampleUsing a combination of common prudence tools in a wide range of areas, from stocking its shelves full with items customers want to buy to executing on a release revamp of its information technology and supply chain management systems, a new senior management team is revitalising the whole organisation from top to bottom.This brief history helps us analyse the power point 2003 to 2006, during which Sainsburys hit the dust with their first-ever revenues slump in history (in the year ended March 2005) and then as nimbly picked itself up and began staging a comeback. We can learn how they are doing by studying the guilds yearbook reports which are the official snapshots of the whole corporation each year. Just like any other company at the mercy of its stakeholders (Freeman, 1984), Sainsburys is expected to behave to satisfy everyone.Identify significant areas of the accounts for 2006 where judgment has been used in determining the appropriate news report policy for the company (for example depreciation of fixed assets). Critically treat how such judgments have materially affected the accounts in terms of valuation and lucrativeness.There are several(prenominal) portions in Sainsburys 2006 report indicating where judgment has been used to determine the appropriate accounting policies. ... From the long list of accounting policies, we note the following that in our opinion materially affected the accounts in terms of valuation and profitabilityThe 2006 reports are the Groups and Companys first financial statements prepared under IFRS and therefore, IFRS 1 First-time Adoption of International Financial report Standards was apply. The last statements under UK Generally Accepted Accounting Principles (UK GAAP) were for the 52 weeks to 26 March 2005. An commentary of the transition to IFRS is provided in Note 42. A comparison of the GAAP-based 2005 and IFRS-based 2005 reports showed that whilst non-current assets decline d by almost 3 billion, total candour declined by only 33 million thanks to adjustments in net current liabilities of over 2.9 billion. This shows how add up can surprisingly appear and vanish like magic.Early adoption of the standard Amendment to IAS 19 Employee Benefits is rough-and-ready for annual periods beginning 1 January 2006, i.e. beginning 26 March 2006. However, Sainsburys elected to early adopt this amendment and has applied the requirements of the amendment to the financial statements for the 52 weeks to 25 March 2006. This led to gross actuarial gains of 128 million (Note 42, p. 95), cutting the allowance deficit from 672 million to only 375 million due to a deferred income tax asset. This allowed Sainsburys to conveniently finance the aid fund and contribute towards improving employee motivation.The treatment of Subsidiaries and Goodwill allowed Sainsburys to manufacture current year profits product from its sale of Shaws in 2004 by recycling 123 million of the g oodwill write down from its 2005 results (p. 96), adding net 86 million to profits (See note on p. 95). Goodwill is now not allowed under