The ultimate aim of any modern corporate is growth with profit maximization. Growth is the first and foremost characteristic of nature and its products which include modern societies with all their industrial, agricultural and service sectors and above all the research organizations to cater to the needs of primary, secondary and tertiary sectors. Governed by the laws of the universe and nature, societies, markets and above all human life are in the constant churn of development in the realm of creativity and innovativeness.

Inventory valuation plays a significant role in reporting operating results, as well as the state of affairs of a business entity, because it serves period accounting and happens to be the largest single line item in non-manufacturing firms and public utilities, and the second largest item in many manufacturing firms. Inconsistent and selective valuation methods would result in inaccurate and inconsistent financial results. Empirical literature suggests that inventory valuation is one of the devices often resorted to smooth out a firm’s operating results. The study aims to find out the prevailing practices, diversity in such practices, degree of adherence to mandatory behavioral prescriptions of the Accounting Standard and possible reasons for a substance-wise departure from such stipulations. The study is aimed at aiding policymakers to come out with modified behavioral prescriptions as far as futuristic compliance is concerned. The findings suggest that the disclosure of accounting policies regarding inventory valuation in listed Indian companies is more of a form than of substance, and there is ample scope for improvement in fixing the valuation norms.

The importance of disclosing significant accounting policies and related notes on accounts thereon constitute one significant aspect of the overall accounting disclosure. Carolyn A Streuly made a survey among the Chartered Financial Analysts in the USA, the prime users of annual reports of companies, for ascertaining whether the primary objectives of financial reporting are being met or not. The specific questions that were addressed in this study are: Are there too many disclosures in the annual reports? Should more be added? Are the financial statements and notes useful to financial statement users? Should some items be removed? The result suggested that the primary objective of financial reporting is being met because: 1) The majority of respondents report that the information disclosed in the annual reports is adequate for investment decisions; 2) The primary financial statements range from being very useful to extremely useful to CFAs, on average in investment decisions; 3) The average usefulness of the notes, as a whole, to CFAs in investment decisions falls in the range of being average useful to very useful; 4) The vast majority of individual financial statement line items and notes examined are, on an average, more than moderately useful to CFAs in investment decisions.