hard · Financial Accounting assets
A company changes its inventory method from LIFO to FIFO.
How must this Change in Accounting Principle be reported?
- Prospectively: apply the new method only to current and future periods.
- As a one-time gain or loss recognized directly in the current year's income statement.
- By disclosing the change in a footnote alone, leaving prior-period numbers unrestated.
- Retrospectively: adjust prior-period statements and beginning retained earnings.
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