Change in inventory method

2469 views 5 replies

Hi,

My company was using Avg Method for Inventory valuation,but now they are using FIFO Method.It is correct? Pls advise, actually opening stock  is derived from Avg Method and Closing Stock is from FIFO Method.

 

 

 

Replies (5)

FIFO METHOD IS CORRECT AS PER AS 2

FIFO method is correct..however some disclosure requiremetns are to be followed..

As per AS-2 FIFO method is correct, however as per It is to be disclosed by ther management in notes to accounts.

FIFO MEthod is correct as per AS-2,..

 

The change of avg to FIFO method should require a seperate disclosure as it comes UNDER CHANGE IN ACCOUNTING POLICY.

you have to disclose

1. Reason for the change//(in this case it wud be better prsentation of finacial statement and in complaice with AS)

2. Financial impact due to change .

 

Financial Impact of change needs to be provided & seperately disclosed....

change is not an issue.


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