Harley-Davidson manufactures motorcycles and accessories. Financial information from the 2014 annual report is excerpted as follows:
Inventory obsolescence reserves deducted from FIFO cost were $17.8 million and $17.5 million as of December 31, 2014 and 2013, respectively.

REQUIRED:
a. Why would a potential investor or creditor who is considering investing in Harley-Davidson be interested in the difference between LIFO and FIFO inventory values?
b. Explain why obsolete inventory is deducted from the carrying value of the asset.
c. Harley-Davidson€™s effective tax rate is 34.2 percent. Approximately how much more income tax would the company have paid if at the end of 2014 it switched to FIFO?
d. Discuss why Harley-Davidson might resist adopting IFRS.

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Balance Sheet Information: Inventories, net (in thousands): 2014 2013 Components at the lower of FIFO cost or market Raw materials and work in process $151,254 $140,302 Motorcycle finished goods 230,309 205,416 Part and accessories and general merchandise 117,210 127,515 Inventory at lower of FIFO cost or market 498,773 473,233 (49,902) Excess of FIFO over LIFO cost (48,726) $448,871 $424,507