LIFO


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LIFO

An abbreviation for last in, first out, a method used in inventory accounting to value the merchandise of a particular business.

LIFO assumes that the last goods purchased are the first sold and, as a result, those items that remain unsold in the inventory at the end of the year are assumed to be those which were purchased first.

Cross-references

FIFO.

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References in periodicals archive ?
Walgreens booked a pretax LIFO credit of $8 million versus a $132 million charge a year ago.
Some taxpayers consider changing from the LIFO method before or after an S election, believing that the effort to maintain the LIFO calculation is not worth the benefit after the LIFO recapture amount is recognized as income.
taxpayer had violated the LIFO conformity rule by providing a bank with financial statements prepared under both U.
GAAP provides that a change in a firm's inventory method is generally applied retrospectively to the prior financial statements presented in the current year's annual report (Accounting Standards Codification [ASC] section 250: Accounting Changes and Error Corrections) Assuming that the new inventory method increases the book value of inventory relative to LIFO (as is generally the case), a company will increase the book value of inventory, increase retained earnings to reflect an increase in net income, and increase income tax liability (current and deferred) due to the increase in taxable income.
Although a brief summary of LIFO and FIFO is presented in the case, a more thorough review may be necessary.
One important aspect of this change is the elimination of the use of the LIFO method because the IFRS simply does not allow it.
To me, it seems the solution to both concerns for LIFO routing would be to set a threshold that monitors wait times and moves calls up in priority after they had waited for X minutes.
For this reason, it is likely that Congress would repeal the LIFO method prior to any effective date for conversion to IFRS, so that it can "score" the revenue gains from the resulting Sec.
The prediction that a company will use LIFO if it has high inventory level is incorrect.
However, should the issue resurface this year, with any kind of support, it could present retailers using LIFO with an unpleasant tax bill.
As a result, in a period of rising prices, the LIFO method tempers the distortive effect of inflation on the taxpayer's reported profits.