For a number of years, Turnbow Company, a manufacturer of telecommunications equipment, has been using the LIFO method adjusted for lower of cost or market. Because the prices of its equipment have been falling, Turnbow has had to reduce the cost of inventory to market each year for two years. It is now considering changing its method to FIFO adjusted for lower of cost or market.
Explain how the accounting conventions of consistency, full disclosure, and conservatism apply to this decision. If the change were made, why would management expect fewer adjustments to market in the future?