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DQ 1 Week 2 - companies using any valuation method to...

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DQ 1 Week 2 The main problem is that under IFRS, LIFO (last-in, first-out) is not permitted. This would force all companies that value inventory according to LIFO to change their method of accounting for inventory. This will cost immeasurable time and resources, in order to change methods. If the company was permitted to keep LIFO for management purposes, the company would not be able to keep LIFO for tax reporting or income statement purposes. In addition, GAAP permits U.S.
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Unformatted text preview: companies using any valuation method to write-down their inventory under certain circumstances, like when it becomes obsolete or loses value. Under IFRS, no write-downs are permitted in inventory. Any write-downs that were recognized in previous years would have to be reversed in the year that it was written down in the company's income statement. Additional student resources: http://www.nysscpa.org/ezine/ETPArticles/ML110608.htm...
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