Valuation of closing stock
This query is : Resolved
HARISH BANSAL
(Querist)
08 September 2012
Dear Expert,
Let say a Co. was adopting FIFO Method for valuation of his Closing Stock for last 4 years. But now in this year, Co. wants to adopt Weighted Avg. Method.So i want to know that i have to give retrospective effect or Not ?
Let say a Co. was adopting FIFO Method for valuation of his Closing Stock for last 4 years. But now in this year, Co. wants to adopt Weighted Avg. Method.So i want to know that i have to give retrospective effect or Not ?
Dintakurthi Tirumala
(Expert)
08 September 2012
I think no need to give retrospective effect. But however effect on profit for the year regarding such change should be disclose and regarding change should be indicate in the audit report.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
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CA Ayush Agarwal
(Expert)
08 September 2012
Yes, Agree With The reply.
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CA Ilayaraja
(Expert)
08 September 2012
The change of valuation of inventory is a case of change of accounting policy according to AS 5.Any change in an accounting policy which has a material effect
should be disclosed. The impact of, and the adjustments resulting from,
such change, if material, should be shown in the financial statements of
the period in which such change is made, to reflect the effect of such
change. So, no need to show the retrospective effect. its enough to give the current year's effect
should be disclosed. The impact of, and the adjustments resulting from,
such change, if material, should be shown in the financial statements of
the period in which such change is made, to reflect the effect of such
change. So, no need to show the retrospective effect. its enough to give the current year's effect
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