Users' questions

Is LIFO still allowed?

Is LIFO still allowed?

LIFO is prohibited under IFRS and ASPE. However, under the US Generally Accepted Accounting Principles (GAAP), it is permitted.

What is LIFO liquidation?

A LIFO liquidation is when a company sells the most recently acquired inventory first. It occurs when a company that uses the last-in, first-out (LIFO) inventory costing method liquidates its older LIFO inventory.

What happens when LIFO reserve is depleted?

If the LIFO layers of inventory are temporarily depleted and not replaced by the fiscal year-end, LIFO liquidation will occur resulting in unsustainable higher gross profits. LIFO liquidation may also generate positive cash flow and result in higher taxable income and higher tax payments.

What happens to LIFO when prices are falling?

When prices are falling: A. LIFO will result in lower income and a lower inventory valuation than will FIFO. LIFO will result in higher income and a higher inventory valuation than will FIFO.

Is it good for the economy to repeal LIFO?

In the past few years, lawmakers have targeted LIFO for repeal either to raise revenue or as part of broader tax reform. According to the Tax Foundation’s Taxes and Growth Model, repealing LIFO would raise the cost of capital and result in a smaller GDP in the long run.

Why is LIFO being targeted for tax reform?

Lawmakers have recently targeted LIFO for repeal, either as a means to raise revenue or as a part of broader tax reform.

Where was my keyfob on my 2014 Jeep?

My keyfob was in the opposite pocket as my phone, but in my pocket closest to the door. I also had it in the same pocket as my work badge, which is an rfid type thing. I can’t remember if this was the case the previous times. Has this happened to anybody else? Yes, I posted the same thing a week or two ago, alarm and all.

What does LIFO reserve mean on a tax return?

A LIFO reserve is an accounting entry that reflects the sum of all taxable income that would have resulted if the company had been using FIFO accounting. The business above that used LIFO had a taxable income of $8.