Page 2 - 28. COMPILER QB - IND AS 8

INDAS – 8

ACCOUNTING POLICIES, CHANGES IN

ACCOUNTING ESTIMATES AND ERRORS

(TOTAL NO. OF QUESTIONS – 9)

INDEX

S.No. Particulars Page No.

1 RTP Questions 28.1
2 MTP Questions 28.8

3 Past Exam Questions 28.11

RTPs QUESTIONS

Q1 (RTP May 19; MTP Oct 18)

ABC Ltd. changed its method adopted for inventory valuation in the year 2018-2019. Prior to the change,
inventory was valued using the first in first out method (FIFO). However, it was felt that in order to match
current practice and to make the financial statements more relevant and reliable, a weighted average valuation
model would be more appropriate.
The effect of the change in the method of valuation of inventory was as follows:

● 31st March, 2017 - Increase of Rs 10 million
● 31st March, 2018 - Increase of Rs 15 million
● 31st March, 2019 - Increase of Rs 20 million
Profit or loss under the FIFO valuation model are as follows:

2018-2019 2017-2018

Revenue 324 296
Cost of goods sold (173) (164)
Gross profit 151 132
Expenses (83) (74)
Profit 68 58

Retained earnings at 31st March, 2017 were Rs 423 million
Present the change in accounting policy in the profit or loss and produce an extract of the statement of
changes in equity in accordance with Ind AS 8.

28. 1