Economics · Accounting Framework
In applying the enhancing qualitative characteristic of comparability, how should a voluntary change in an entity's inventory valuation basis be accounted for?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The financial statements for the prior comparative period should be retrospectively restated using the new basis.✓
- 2The notes should explicitly calculate what the profit would have been if the change had not taken place.
- 3The current financial statements should present the line items calculated under both methods parallelly.
- 4The change should be disclosed in the footnotes only, without altering numbers.
Correct answer
The financial statements for the prior comparative period should be retrospectively restated using the new basis.
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