My company is a tea manufacturing company. It is a public listed company. It prepared its financial statements based on calendar year (Jan-Dec). But the finance act of the country required that the company has to change its accounting year from calendar year to fiscal year (July-June). For this, the company had to prepare eighteen months account (Jan-Dec, 15 and Jan-June 16) last year when these two accounts were audited separately. usually closing stock is valued at lower of cost and NRV and the cost is ascertained through dividing the total production cost of the year by the total units (Kg of made tea) produced. when the six months accounts (Jan-June,16) was prepared, the value of closing stock became high as this period (Jan-June) is the cultivation period for the tea sector with minimum production and high cost. During this year we are going to prepare financial statements for 12 months (July'16-June'17) and when we prepare cost of goods sold statement it appears that COGS is abnormal this year because of high valued opening stock. this year per kg value of closing stock is around Tk.150 whcih was Tk.200 during last six month audited account and if we make valuation of closing stock for same period last year (Jul'15 to June'16), value will be around Tk.150 per kg in place of Tk.200 per kg. Now, my question is, can we revalue the opening stock with retrospective restatement of retained earnings and inventory to ensure comparability and faithful representation. one thing is that, my company is going to incur operating loss just because of this high value opening stock which increases the COGS.
Thank you.
