O'Reilly logo

Investment: An A-Z Guide by Philip Ryland

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

L

Last in, first out

How a company accounts for its INVENTORY has a big effect on the profits it declares and the taxes it pays. The United States is unusual because its tax authorities are among the few that allow companies to account for their inventory on the basis of last in, first out (LIFO). This means that the inventory whose cost is first of all deducted from revenues for computing profits is that which was most recently purchased. Assuming that the cost of inventory rises, then the effect is to minimise both declared profits and tax payable. It is logical in so far as it excludes profits which are simply the result of the fortuitous gain in the value of inventory and it shows profits in a conservative light. In those industries ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required