Can you please help me know this. What is affect of LIFO and FIFO on Balance sheet, Income statement, and Taxes. Can someone give me this connection in a simple manner?

Depends on the particular situation. LIFO means that most recent stock will be sold/used so it also depends if the cost of the stock is rising (usually the case) or falling. So in the case of LIFO, higher sold inventory cost means that compared to FIFO, profits are lower, assets (remaining stock) are lower, and taxes are also lower (because profits are lower).

A CFA General Discussion About LIFO And FIFO

Add A Reply

This topic has 1 reply, 2 voices, and was last updated Jun-193:27 pm by CFA_anon.

Author

Posts
- veronicamexie
  Participant
  - Undecided
  20 Jun 2019 at 1:08 pm
  Up
  0
  ::
  Can you please help me know this.
  
  What is affect of LIFO and FIFO on Balance sheet, Income statement, and Taxes.
  
  Can someone give me this connection in a simple manner?
- CFA_anon
  Participant
  20 Jun 2019 at 3:27 pm
  Up
  4
  ::
  Depends on the particular situation. LIFO means that most recent stock will be sold/used so it also depends if the cost of the stock is rising (usually the case) or falling. So in the case of LIFO, higher sold inventory cost means that compared to FIFO, profits are lower, assets (remaining stock) are lower, and taxes are also lower (because profits are lower).
Author

Posts

Viewing 1 reply thread

You must be logged in to reply to this topic.