Comparability and Consistency due 1202, 1.4 points (if outstanding; 1.2 points for acceptable work)

Two of the qualitative characteristics (I will call them concepts) of high-quality accounting information are comparability and consistency. Comparability means that different companies report the same account using similar standards. Consistency means the same company reports the same account from year to year using similar standards across years.

Option 1. Please provide examples of the concepts of both comparability and consistency. This option does not ask for specific real-life examples, but more of an illustration of the concept. I will provide an example, which you cannot use. Companies can choose between different inventory methods such as LIFO and FIFO, but they must be consistent in this usage from year to year. So please provide a similar conceptual example. Also please provide exceptions when you think it is appropriate to depart from these concepts.

1a. Comparability

2b. Consistency

1c. Exceptions