On January 1, Year 3, a company changed its inventory costing method from LIFO to FIFO. The company's Year 3 financial statements contain comparative information for Year 2. How should the company present the Year 2 effect of the change in accounting principle in its Year 3 comparative financial statements?

The result generated by the method change must be expressed within the income statement as an extraordinary result.

And within the statement of financial situation, a note must be included where the change of method is reported and what the valuation of the inventory would have been if the method had not been changed.