GAAP and IFRS differ on the rules regarding LIFO as GAAP allows LIFO to assign costs to inventory and IFRS does not.

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) allows the use of LIFO (Last In, First Out) method to assign costs to inventory, while IFRS (International Financial Reporting Standards) prohibits LIFO and instead requires the use of other methods such as FIFO (First In, First Out) or weighted average cost. Therefore, the statement is true.

GAAP and IFRS Differ on the Rules Regarding LIFO as GAAP