Training & Reference Material
The primary reasons LIFO errors are so common:
- Errors resulting from the use of spreadsheets
- Lack of understanding of LIFO IRS Regulations and basic LIFO principles
One of the reasons for the latter is the lack of adequate LIFO training and reference materials especially as it relates to the IPIC method. LIFO-PRO, Inc. has authored LIFO training and reference guides to help companies and CPAs understand the existing LIFO Regulations. The LIFO guides include the benefit of our practical LIFO experience that is the by-product of 23 years of experience in helping clients turn their LIFO challenges into LIFO solutions.
The LIFO guides written by LIFO-PRO, Inc. include
- Guide for Planning & Implementation of the IPIC LIFO Method- The advantages and disadvantages of this method are discussed. The cryptic IRS IPIC method Regs. including those for the 10% method are explained including illustrations of examples of calculations. This Guide describes ways in which companies have dealt with the challenges of sorting inventory balances by the required PPI or CPI category breakdowns and other planning ideas that we have seen in practice over the years. In addition to a generic guide, we also have written guides specifically for these retailers which address the unique challenges companies in these industries face with the IPIC method:
- Supermarket chains
- Department and discount store chains
- Convenience store chains
LIFO Inventory Training Basics & Audit Guide- LIFO calculation errors are so common because of lack of LIFO training and the use of error prone spreadsheet assisted manual calculations and this guide is a valuable resource to decrease the likelihood of LIFO calculation errors. The Training Basics section of this guide contains a comprehensive LIFO terms glossary, a complete description of the LIFO method alternatives and the steps to make LIFO calculations with numerous examples. The Audit Guide section of the publication includes a list of about 60 different LIFO potential error types along with examples of the errors, the applicable IRS or GAAP reference and a description of how to detect and prevent each error type. This section includes sample calculation documentation that should be used to decrease the likelihood of errors. This section also includes a description of the purpose for each of the different LIFO report formats and an example of model LIFO Methods & Procedures Policy History document. This guide is the only LIFO training or reference guide to deal with the subject of LIFO internal control in a comprehensive fashion.
- LIFO Resource Guide for CPAs- This was written for CPAs in public accounting to describe ways they can help their clients best address their LIFO needs including whether their clients would benefit from a different LIFO method and whether they have clients not using LIFO that could reduce their taxes by adopting LIFO.
These guides are provided to our clients at no charge
Other LIFO Guides
In addition to the LIFO guides written by LIFO-PRO, Inc., there is a good general LIFO training guide authored by John Purtill entitled LIFO Inventory:Tax and Accounting Issues. The coverage of the IPIC method in this book is very brief but this covers non-IPIC LIFO issues in greater detail than the LIFO-PRO, Inc. guides. Information on this book is available at www.purtill.com.
The Income Taxation of Inventories under the Last-in, First-out Method by Charles Davenport and W. Eugene Seago. This book is quite lengthy and includes a lot of LIFO history and numerous citations of IRS Regs., Rev. Procs., Rev. Rulings, etc. Although this book includes more about the IPIC method than the Purtill book, the book was written before the new IPIC LIFO Regs. were published in 2002. This book is published by Mellen Press.
Federal Income Taxation of Inventories is a 3 volume, looseleaf treatise published by LexisNexis and authored by Leslie Schneider. This definitive work analyzes every aspect of inventory taxation, including valuation of goods, UNICAP rules and, LIFO inventories.
Inventory Tax Accounting and Uniform Capitalization is a part of the Tax Practice Series published by Thomson West and authored by W. Eugene Seago.
Contact LIFO-PRO today to obtain electronic/paper copies of our Training & Reference Material: