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Basic Question 18 of 24
Under U.S. GAAP, a company that uses the LIFO method to compute taxable income must use the ______ method for financial reporting.
B. average cost
C. LIFO
A. FIFO
B. average cost
C. LIFO
User Contributed Comments 4
| User | Comment |
|---|---|
| kalps | Clealry this is an important poitn as the question has been asked twice - LIFO for tax means must use LIFO for FR as well |
| cbb1 | LIFO is the only inventory method that if used for tax, must also be used for financial reporting. Otherwise, inventory methods can vary for book and tax. |
| sha09 | is it only U.S. that uses LIFO? IFRS banned use of LIFO.... |
| bablig | Thats right sha09 |
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Learning Outcome Statements
describe general principles of expense recognition, specific expense recognition applications, implications of expense recognition choices for financial analysis and contrast costs that are capitalized versus those that are expensed in the period in which they are incurred
CFA® 2024 Level I Curriculum, Volume 2, Module 2.