For a change from the average cost method to FIFO, the current year's income includes the cumulative after-tax difference that would have resulted if the company had used FIFO in all prior years.

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When a company changes its inventory accounting method, it must apply the change retrospectively, adjusting prior years' financial statements to reflect the new method as if it had always been used, rather than including the cumulative difference in the current year's income.

For a Change from the Average Cost Method to FIFO