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Yes, provided that the change results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. For e.g. the cost formula previously used was weighted average and the co. trades in steel and the steel prices have gone up tremendously. The co. feels that using the FIFO method would result in ending inventory cost being more realistic than using weighted average as it would approximate better the current prices of steel.

2007-08-03 17:11:01 · answer #1 · answered by Sandy 7 · 0 0

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