Many U.S. companies that have international operations use LIFO for U.S. purposes but use FIFO for their foreign subsidiaries.

Question

Quizplus · Accepted Answer

This is because LIFO (last-in, first-out) is not permitted under International Financial Reporting Standards (IFRS), which are used in many countries outside the United States. Therefore, companies may choose to use FIFO (first-in, first-out) for their foreign subsidiaries to make financial reporting consistent across all their operations. However, they may continue to use LIFO for tax purposes in the United States.

Many US Companies That Have International Operations Use LIFO for U