A change in inventory costing method should be applied prospectively.

Question

Quizplus · Accepted Answer

A change in inventory costing method usually requires a retroactive adjustment of prior period financial statements to reflect the new method applied consistently. However, if it is impractical to retroactively adjust prior period financial statements, then the change should be applied prospectively. Therefore, the answer depends on the practicality of making retroactive adjustments.

A Change in Inventory Costing Method Should Be Applied Prospectively