Wall Street is dry-eyed and just as happy to see Lifo go

Mar 19, 2009 | 04:36 AM |

For securities analysts, dealing with last-in, first-out (Lifo) inventory accounting is a fact of life. But it probably won't be missed very much if a new set of global financial reporting standards eventually results in Lifo's demise.

The U.S. Securities and Exchange Commission (SEC) has circulated a "roadmap" for introducing International Financial Reporting Standards (IFRS) for publicly held companies by 2014. Unlike the existing framework of Generally Accepted Accounting Principles (GAAP) that currently guides U.S. companies, IFRS doesn't include Lifo.

Lifo is an accounting technique designed to reduce the taxes paid by both public and private companies, but the Internal Revenue Service's so-called conformity rule compels those who use it for this purpose to also use it for financial reporting.....

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