medium · Financial Accounting assets
What is the 'LIFO Conformity Rule' in the U.S. tax code?
- If a company uses LIFO, it must switch to IFRS standards within three years.
- If a company uses LIFO for tax purposes, it must also use LIFO for its external financial reporting.
- A company must use the same inventory method for all product lines to ensure consistency.
- Taxable income must be exactly equal to GAAP net income for LIFO users.
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