When we change the valuation of inventory , how will we adjust the difference in our accounts ?
CA Sapna Ghelani (Chartered Accountant) (7550 Points)
18 March 2021When we change the valuation of inventory , how will we adjust the difference in our accounts ?
CA. Sourav Sarkar
(Chartered Accountant )
(24588 Points)
Replied 18 March 2021
Chiranjivi Nagpal
(6 Points)
Replied 18 March 2021
anil jain
(Partner)
(1072 Points)
Replied 18 March 2021
Do inventory is entered in books.
As per my opinion only sales and purchases are routed through books.
Value of inventory is entered as closing stock in Trading and P&L (cr item) and also in BS (dr item) nullifying the impact on TB/PL/BS.
If you change the method of valuation the impact is reported in notes to account per requirement of AS, and impact is not routed through P&L. Impact is automatically affect the PL and BS through "entered as closing stock in Trading and P&L (cr item) and also in BS (dr item)"
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