Action and Fashion (A&F) Company is a specialty retail company operating over 1,000 stores globally. The following
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Action and Fashion (A&F) Company is a specialty retail company operating over 1,000 stores globally. The following disclosure note was included in the financial statements:
Required:
1. What approach should A&F take to account for its change in inventory accounting (retrospective, modified retrospective, or prospective)?
2. Will A&F need to restate financial statements prior to the year of the accounting change (yes/no)?
3. Which enhancing qualitative characteristic of accounting best describes the reason for A&F’s approach to accounting for its change in inventory method?
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