if-a-company-changes-its-accounting-principle-from-fifo-to-weighted-average-how-

Question

If a company changes its accounting principle from FIFO to weighted average, how should this change be reflected in the financial statements under GAAP and IFRS?

Accepted Answer

Retrospectively adjust prior periods to reflect the new principle.

Answer

Adjust only the current period's financial statements.

Answer

Apply the new principle prospectively from the current period.

Answer

Disclose the change in the notes without adjusting prior periods.