Write a 500- to 750-word response to the question below "LIFO has been used by Client X to value its inventories. Client X has contacted you for clarification and recommendations on how the use of the...

The US GAAP allowed the use of LIFO Method for the valuation of inventories. LIFO Method
is accepted by IRS also for taxation purposes. IFRS prepared by IASB does not allow LIFO
Method for the valuation of inventories. IAS- 2 on Inventory Valuation clearly requires the
adoption of either FIFO Method or weighed Average Method. Although LIFO method is
considered the best in the inflation scenario, still it does not find any place in the books which
are prepared on the basis of historical cost accounting framework. When the statements are
prepared under price level accounting or inflation accounting, LIFO is still considered as the best
possible Method.
In all economies of the world there is price rise or inflation. LIFO Method ensures that cost of
goods sold is maximized as the latest cost in assigned to the production and hence Gross profits
are minimized. The entity certainly likes the method to be followed for computing...