Which of the following changes in accounting principle does not require the retrospective approach?
A) Change from the percentage-of-completion to the completed-contract method
B) Change of inventory method from LIFO to FIFO
C) Change of inventory method from FIFO to LIFO
D) All of these require retroactive adjustment.

Question

Quizplus · Accepted Answer

Changes in accounting principle generally require retrospective application to prior periods' financial statements to make the statements comparable across periods. However, the change from FIFO to LIFO is an exception where the retrospective approach is not required due to the complexity and impracticality of determining previous years' LIFO layers. Instead, the change is applied prospectively.

Which of the Following Changes in Accounting Principle Does Not