The management of Mogul Manufacturing has decided to switch from FIFO to LIFO.Because this is a change in accounting method, the company must secure approval from the IRS before it can switch.

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Companies in the United States are allowed to switch from FIFO (First-In, First-Out) to LIFO (Last-In, First-Out) accounting methods without securing prior approval from the IRS. However, they must file Form 970, Application to Use LIFO Inventory Method, with their tax return for the year in which they first use LIFO.

The Management of Mogul Manufacturing Has Decided to Switch from FIFO