Changing inventory methods to take advantage of the tax breaks offered by LIFO is not a valid reason for a change in methods.

Question

Quizplus · Accepted Answer

Changing inventory methods solely for tax advantages, such as those offered by LIFO (Last In, First Out), without a sound business reason, is generally not considered a valid reason for a change in accounting methods according to accounting principles and may be scrutinized by tax authorities.

Changing Inventory Methods to Take Advantage of the Tax Breaks