- LIFO Reserve
The difference between the FIFO and LIFO cost of inventory for accounting purposes. The LIFO reserve is an account used to bridge the gap between FIFO and LIFO costs when a company is using FIFO but would like to report LIFO in its financial statements. The constant increase in cost can create a credit balance in the LIFO reserve, which results in reduced inventory costs when reported on the balance sheet.
In order to ensure accuracy, a LIFO reserve is calculated at the time the LIFO method was adopted. The year-to-year changes in the balance within in the LIFO reserve can also give a rough representation of that particular year's inflation, assuming the type of inventory has not changed. Account professionals have discouraged the use of the word "reserve," therefore causing accountants to use other terms like revaluation to LIFO, excess of FIFO over LIFO cost and LIFO allowance.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
LIFO reserve — The amount by which the book value of inventory is lower than it would be if first in, first out ( FIFO) rather than LIFO accounting was applied to value the inventory. Only relevant to firms reporting inventory on a LIFO basis. American Banker… … Financial and business terms
Резерв ЛИФО (LIFO RESERVE) — Нереализованная прибыль, входящая в стоимость запасов на конец периода, размер которой определяет разность между оценками стоимости запасов по методам ЛИФО и ФИФО … Словарь терминов по управленческому учету
Cost of goods sold — Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · Chart of accounts … Wikipedia
Flow Of Costs — Refers to the manner in which costs move through a firm. Typically, the flow of costs is relevant to a manufacturing environment where accountants must quantify what costs are in raw materials, work in process, finished goods inventory and cost… … Investment dictionary
Invested Capital — represents the total cash investment that shareholders and debtholders have made in a company. There are two different but completely equivalent methods for calculating invested capital. The operating approach is calculated as:Invested capital =… … Wikipedia
резерв ЛИФО — Нереализованная прибыль, входящая в стоимость запасов на конец периода, размер которой определяет разность между оценками стоимости запасов по методам ЛИФО и ФИФО. [http://www.lexikon.ru/dict/uprav/index.html] Тематики бухгалтерский учет EN LIFO… … Справочник технического переводчика
Nord-Karolina — North Carolina (Details) … Deutsch Wikipedia
Nordkarolina — North Carolina (Details) … Deutsch Wikipedia
Nordkarolinien — North Carolina (Details) … Deutsch Wikipedia
Revenue — For other uses, see Revenue (disambiguation). Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · … Wikipedia