Even though the statements were provided as required by an already existing letter of credit rather than to obtain new credit, the IRS considered maintaining a current credit relationship to fall under the definition of "credit purposes." Taxpayers that use LIFO
for tax reporting purposes are allowed to issue financial statements on a basis other than LIFO
only if they are for noncredit purposes and are not provided to shareholders or other owners.
Although IFRS has far more disclosure requirements than GAAP, companies following GAAP have disclosures on inventory classification, accounting policy, cost basis, and LIFO
disclosure, if necessary.
public companies would not be allowed to use LIFO
, unless the SEC provided a specific exception for this inventory accounting standard.
The focus of the adjustments will be the found in the LIFO
reserve balance that the company reported because of its use of LIFO
On the income statement, the use of the LIFO
method typically overstates the cost of goods sold and thus understates gross profits, operating profits, and net profits.
Have a few ideas on LIFO
and FIFO routing, or some other type of routing methodology?
This adjustment essentially represents the cumulative tax benefit the company obtained by using LIFO
. For many companies, the Sec.
The authors studied a database from COMPUSTAT of 175 FIFO firms and 48 LIFO
firms with respect to the eight above-mentioned factors.
Boyle noted that "repealing the LIFO
method--which the Code has permitted for nearly seven decades--would adversely affect many business taxpayers by increasing their tax bills, potentially leading to a significant loss of U.S.-based jobs." He explained that the objective of LIFO
is to permit taxpayers to properly match their current sales revenues with the current replacement costs and thereby compute--and pay taxes on--a meaningful gross profit amount.
has tested and assessed a vast range of people in the past year and surveys have illustrated that people with massive ability often have no commitment or drive, whereas there are average intellect staff who put in massive efforts to improve themselves and their colleagues.
adopts the reverse methodology, assuming that the last asset the company purchased is the first it uses.
Returning to that former assignment to discuss the methods of inventory costing: You would probably quickly identify FIFO, LIFO
, weighted average, and specific identification.