ACC Limited has prepared its financial statements using the calendar year as its accounting period. The last financial statements were prepared for the year ended 31st December 2013. The Companies Act 2013, has now made it mandatory for the Indian companies to keep their accounts using financial year (i.e., 1st April to 31st March) as the accounting period. Companies are allowed a period of two years to switch over to the financial year. To meet the requirement of the law, ACC Limited would need to adopt the financial year for its accounts. 

Questions for Discussion 

1. The change in accounting period is a violation of consistency principle. Comment. 

2. What should ACC Limited do to change the accounting period?

3. What accounting periods would you suggest during the transition period?