12-17-2010, 05:45 AM
Hi,
Another question.
If one switches from lets say FIFO to average cost method to fix retained earnings where do you start fixing the opening inventory?
If lets say 2002 is the earliest year of business and you you are preparing a financial statement for 2005 and in it you compare it to the results of 2004? You fix the opening inventory of 2004. But do you have to fix the opening inventory of 2003 to get the right opening inventory for 2004? And do you go all they way back to the opening inventory of 2002 just to get the right opening inventory of 2004? Or do you just change the results for 2004?
Another question.
If one switches from lets say FIFO to average cost method to fix retained earnings where do you start fixing the opening inventory?
If lets say 2002 is the earliest year of business and you you are preparing a financial statement for 2005 and in it you compare it to the results of 2004? You fix the opening inventory of 2004. But do you have to fix the opening inventory of 2003 to get the right opening inventory for 2004? And do you go all they way back to the opening inventory of 2002 just to get the right opening inventory of 2004? Or do you just change the results for 2004?
