Evidence on the Choice of Inventory Accounting Methods: LIFO Versus FIFO

Dopuch, Nicholas; Pincus, Morton

doi:10.2307/2491112

Cited by 88 publications

(46 citation statements)

References 23 publications

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“…This result provides theoretical support for the suggestion of Dopuch and Pincus (1988) that LIFO choice might be accompanied by increased leverage due to taxes being a confounding variable. in proposition 4, there are other possibilities.…”

Section: Propositionsupporting

confidence: 74%

“…Lindahl (1989) finds a significantly negative relation between debt and choice of LIFO. Hunt (1985) also finds a negative relation, whereas Morse and Richardson (1983) and Dopuch and Pincus (1988) find no significant association. The underlying assumption in these studies is that there is an optimal inventory choice that depends on existing firm-specific factors.…”

Section: Discussionmentioning

confidence: 99%

“…Lindahl (1989) estimates cross-sectional and dynamic models of LIFO choice and finds a significantly negative relation between a firm's debt/equity ratio and the use of LIFO. However, Dopuch and Pincus (1988) predict that a firm facing relatively high marginal tax rates might hoth issue more debt and switch to LIFO, thereby causing a positive association.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Continuous Signaling within Partitions: Capital Structure and the FIFO/LIFO Choice

Hughes

Thakor

1994

Journal of Accounting, Auditing & Finance

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Section: Propositionsupporting

confidence: 74%

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Continuous Signaling within Partitions: Capital Structure and the FIFO/LIFO Choice

Hughes

Thakor

1994

Journal of Accounting, Auditing & Finance

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“…Boleh jadi angka laba berubah tetapi tidak berdampak pada aliran kas. Sedangkan penelitian empiris membuktikan diskresi manajemen dalam pemilihan metoda akuntansi yang tidak berdampak pada aliran kas tidak direspon oleh pasar (Dopuch & Pincus 1988;Fellingham 1988).…”

Section: Kajian Teori Dan Pengembangan Hipotesisunclassified

“…Kos barang terjual juga relatif bebas dari pilihan metoda akuntansi. Jika pun ada, hanya pilihan antara FIFO dan LIFO yang di dalam penelitian dibuktikan tidak memengaruhi keputusan investor (Dopuch & Pincus 1988;Fellingham 1988).…”

Section: Kajian Teori Dan Pengembangan Hipotesisunclassified

Prediksi Aliran Kas Berdasarkan Laba Fungsional dan Aliran Kas Kelambanan: Komparasi antara US dan Indonesia

Narsa¹

2011

jak

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ABSTRAK Pengklasifikasian negara menjadi negara maju vs negara berkembang, pasar modal mapan vs pasar modal baru tumbuh, budaya individualistik vs kolektifistik; US vs. non-US PENDAHULUANDua jenis informasi akuntansi yang mengukur kinerja operasional perusahaan dan mendapat perhatian paling utama dari investor dan kreditor adalah laba rugi dan aliran kas. Ketika investor dihadapkan pada dua indikator kinerja tersebut, investor dan kreditor harus yakin bahwa indikator kinerja yang menjadi fokus perhatian mereka adalah indikator kinerja yang paling

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Costs and benefits of the LIFO‐FIFO choice

Ling,

Tinkelman

2024

J Corp Accounting Finance

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The choice of inventory cost flow assumption is a key financial reporting decision. The resurgence of inflation has renewed interest in this option. We derive algebraic models of the LIFO‐FIFO difference in cost of goods sold and the LIFO tax savings as a function of inflation, turnover, inventory increments, and tax rates. Managers and researchers can use these models to estimate the likely financial and tax impacts of LIFO adoption. Historic trends in public company LIFO usage since 1971 are consistent with the changing impacts estimated by our model. We infer an approximate cost level of using LIFO based on historic public company behavior. In the 1971–2022 period, LIFO adoptions were only common when the tax benefit in our model exceeded about 0.35% of COGS. Even when inflation rose in 2021 and 2022, the tax savings remained below this threshold, and there were far more LIFO abandonments than adoptions.

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Evidence on the Choice of Inventory Accounting Methods: LIFO Versus FIFO

Cited by 88 publications

References 23 publications

Continuous Signaling within Partitions: Capital Structure and the FIFO/LIFO Choice

Continuous Signaling within Partitions: Capital Structure and the FIFO/LIFO Choice

Prediksi Aliran Kas Berdasarkan Laba Fungsional dan Aliran Kas Kelambanan: Komparasi antara US dan Indonesia

Costs and benefits of the LIFO‐FIFO choice

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