Question

In conditions of high inflation, nonmonetary assets tend to be stated on the balance sheet at values far below their replacement costs. Inventory accounting can further complicate historical analysis for companies in such an environment. Which accounting methodology would better represent the true value of the inventory in periods of high inflation: last-in first-out (LIFO) or first-in first-out (FIFO)? How would this change in a period of deflation?


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  • CreatedAugust 12, 2015
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