Stock Valuation

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
How often can a limited company change its stock valuation method and how does it advise its shareholders???

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock Valuation

    Hi

    the companies shouldn't change their method of stock valuation during a financial year as it gives a false impression of the stock value...and gets very confusing! From what I can remember it can be changed only at the financial year end and a note should be put into the accounts of the method used.

    Sorry though I'm not sure what period of notice, if any, has to be given?!

    hope this helps!
    Debs :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock Valuation

    thts great thnks
    : -)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock Valuation

    Following on from the above post if a company does change its method of stock valuation from say FIFO valuation to AVCO this would be classed as a change in accounting policy as it is a change of measurement basis. Changes in accounting policies have to be disclosed in the notes to the financial statements (which I am not going to go into as you are not normally required to do these in your exams).

    Kind regards
    Steve

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