Detail on Using LIFO

The difference between the cost of an inventory calculated under the FIFO and LIFO methods is called the LIFO reserve.

If a company uses LIFO, the recorded amount of inventory is not an accurate reflection of cost, reducing comparability to companies using FIFO.

In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed.

Dollar value LIFO (last-in, first-out) is calculated with all figures in dollar amounts, rather than inventory units.

Using LIFO accounting for inventory, a company generally pays lower taxes in periods of inflation.

LIFO is facing pressures from international standards boards that may result in its possible complete elimination.