Case #$1$

Generally accepted accounting principles should be applied consistently from period to period. However, changes within a company, as well as changes in the external economic environment, may force a company to change an accounting method. The specific reporting requirements when a company changes from one generally accepted inventory method to another depending on the methods involved.

Required:

Explain the accounting treatment for a change in inventory method $($a$)$ not involving LIFO, $($b$)$ from the LIFO method, and $($c$)$ to the LIFO method. Explain the logic underlying those treatments. Also, describe how disclosure requirements are designed to address the departure from consistency and comparability of changes in accounting principles.