Taking stock of your inventory accounting method

Description

Abstract: If your business involves the production, purchase or sale of merchandise, inventory accounting can have a significant effect on your tax bill. In some cases, switching inventory accounting methods from first-in, first-out (FIFO) to last-in, first-out (LIFO) can reduce your taxable income, giving your cash flow a boost. This article reviews factors to consider with inventory accounting methods, including tax savings and the effect the change will have on financial statements.