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 ?
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.
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
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