Can we change Accouting policy mid of the Financial Year?

Hi,

Can we change Accouting policy mid of the Financial Year?

We want to change policy from average cost to standard cost.

What other legal compliance except disclosure?

Thanks in Advance

 Sahu

Replies (1)

Yes, you can change accounting policy in the mid of year, but you have to comply with below facts---

Accounting policies must be applied consistently from one period to the next in order to achieve comparability and consistency. However due to following two reasons it can be changed.

  • When required by an IFRS
  • When the change will result in reliable and more relevant presentation of information.

When a change in policy is required by an IFRS, it is also stated in that IFRS in transitional provisions how to settle the matters relevant to change in accounting policy. So these transitional provisions work as user guide.

 But a A voluntary change in accounting policy must be applied retrospectively according to IAS 8 (Accounting Policies, Changes in Accounting Estimated and Errors) unless it is impracticable to do so.



Regards

RAGHAV

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