A Roadblock to US Adoption of IFRS IS LIFO Inventory Valuation

Global Journal of Business Research, Vol. 4, No. 4, pp. 41-49, 2010

9 Pages Posted: 29 Jun 2011 Last revised: 27 Feb 2012

Anne B. Fosbre

Georgian Court University

Paul B. Fosbre

New Jersey City University

Ellen M. Kraft

Richard Stockton College of New Jersey

Date Written: 2010

Abstract

A roadblock exists between International Financial Reporting Standards, (IFRS) and United States Generally Accepted Accounting Standards, (US GAAP) in the area of acceptable methods of inventory valuation. IFRS recognizes the First In First Out Method, FIFO, and the Weighted Average Method of Inventory Valuation as acceptable methods of inventory valuation. It does not recognize or allow the Last In First Out Method of Inventory Valuation, LIFO, as currently used in the United States. Canceling LIFO would require most large US companies to pay excessive amounts of additional income tax to the Internal Revenue Service, IRS. In order for the United States to adopt IFRS Accounting Standards, the elimination of LIFO would have to occur.

Keywords: IFRS, LIFO, FIFO, Inventory Valuation, LIFO Conformity Requirement

JEL Classification: M41, M48

Suggested Citation

Fosbre, Anne B. and Fosbre, Paul B. and Kraft, Ellen M., A Roadblock to US Adoption of IFRS IS LIFO Inventory Valuation (2010). Global Journal of Business Research, Vol. 4, No. 4, pp. 41-49, 2010. Available at SSRN: https://ssrn.com/abstract=1871313

Anne B. Fosbre (Contact Author)

Georgian Court University ( email )

900 Lakeood Avenue
Lakewood, NJ 08701-2697
United States

Paul B. Fosbre

New Jersey City University ( email )

2039 Kennedy Boulevard
Jersey City, NJ 07305-1597
United States

Ellen M. Kraft

Richard Stockton College of New Jersey ( email )

101 Vera King Farris Drive
Pomona, NJ 08240
United States

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