Essay: Financial Statements of Unilever and Food Kraft

Sample Essay

The basic difference between the financial statements of Unilever and Kraft Foods is the use of different accounting standards. The financial statements of Unilever have been prepared using IFRS while those of Kraft Foods have been prepared by applying US GAAP. The other difference is in the se of different currencies for presenting amounts on the financial statements.

The financial statements of Unilever present amounts in Euros while amounts are presented on Kraft Foods financial statements in US dollars. Unilever financial statements do not include statement of shareholders’ equity and information related to changes in share capital are included in the notes that follow these statements. The financial statements of Kraft Foods on the other hand include a separate statement of shareholders’ equity explaining the changes in shareholders’ equity during a year. The accounting policies of the two companies stated in the notes to the financial statements differ from each other in several areas. Inventories in Unilever are valued at lower of cost and net realizable value whereas Last in First out basis is used in Kraft Foods for valuing most inventories.

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