Prior to 2022, Heberling Inc. excluded manufacturing overhead costs from work in process and finished goods inventory.

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Prior to 2022, Heberling Inc. excluded manufacturing overhead costs from work in process and finished goods inventory. These costs were expensed as incurred. In 2022, the company decided to change its accounting methods for manufacturing inventories to full costing by including these costs as product costs. Assuming that these costs are material, how should this change be reflected in the financial statements for 2021 and 2022?

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Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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