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Is the End Near?

The brightest hope for LIFO proponents is the possibility that the accounting method could
yet survive. It is too early yet to tell how strong industry pushback will be on the
Administration’s proposed repeal, but lobbying efforts have stopped it before. Similarly, if
the Securities and Exchange Commission does make IFRS the accounting system of the
land, nonpublic companies won’t have to use the standards. Indeed, if the IRS itself isn’t
the force behind a LIFO prohibition, it might even prove willing, as it has in the past, to
water down conformity regulations requiring that certain methods be used consistently for
both tax and financial reporting.

Perhaps the biggest wild card affecting the government’s decision will be the economy.
“It’s always a terrible time to look at repealing LIFO,” says Jones, “but right now it’s just
another nail in many corporate coffins.”

Marie Leone is senior editor for accounting at CFO.

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