Accounting

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sid (Querist)
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10 October 2015 Change in the method of inventory valuation from fifo to weighted average cost method however has not material impact on financial impact of current year. Should be disclosed or not??

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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10 October 2015 As a good practice it should be disclosed in the notes to accounts even though it has not material impact in current year.

As per AS 1-

"Any change in the accounting policies which has a material effect in the current period or which is reasonably expected to have a material effect in later periods should be disclosed. In the case of a change in accounting policies which has a material effect in the current period, the amount by which any item in the financial statements is affected by such change should also be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact should be indicated."