Question

Generally accepted accounting principles should be appliedconsistently from period to period. However, changes within acompany as well as changes in the external economic environment,may force a company to change an accounting method. The specificreporting requirements when a company changes from one generallyaccepted inventory method to another depend on the methodsinvolved. (chapter 9)

Required: Explain the accounting treatment for a change ininventory method (1) not involving LIFO, (b) from the LIFO method,and (c) to the LIFO method. Explain the logic underlying thosetreatments. Also, describe how disclosure requirements are designedto address the departure from consistency and comparability ofchanges in accounting principle.