If a company changes its inventory valuation method, the effect of the change on net income should be disclosed in the financial statements.

Question

Quizplus · Accepted Answer

A change in inventory valuation method can have a significant impact on a company's net income, and therefore must be disclosed in the financial statements per Generally Accepted Accounting Principles (GAAP). This is typically done through a footnote or disclosure in the financial statements.

If a Company Changes Its Inventory Valuation Method, the Effect