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the purpose of this video is to explain the movements due to change in accounting policy for inventories we assume that an entity was incorporated on 1 January 20 X 12 the closing inventory balances for the 20 X 12 13 14 and 15 year are provided the current financial reporting period is 20 X 15 which means that the comparative period is 20 X 14 during the current financial year 20 X 15 the entity decided to change its accounting policy for inventories from the old method which was first in first out to the new method which is weighted average when we calculate cost of sales in this statement of profit and loss and other comprehensive income we can do it by saying opening inventories plus purchases less closing inventories the opening inventories in this example for 20 X 12 will be naught as this entity was only incorporated on 1 January 20 X 12 purchases will not change just because the accounting policy was changed during 20 X 12 at the end of the financial year the closing balance o
