Disclosure of Accounting Policy in case of Multiple Inventory

AS 1, Disclosures of Accounting Policies, states that to ensure proper understanding of financial statements, it is necessary that all significant accounting policies adopted in the preparation and presentation of financial statements should be disclosed.

Further, para 17(c) of AS 1 states that financial statements should disclose all “material” items, i.e. items the knowledge of which might influence the decisions of the user of the financial statements.

Hence, for entities dealing in multiple products and multi-segment, it is required to assess whether it is sufficient, if, an entity disclose only the policies in respect of primarily traded goods/ commodities only or if it should disclose accounting policies for each item of its inventory.

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