806 – LIFO Adjustment (Decrease Reserve)

Additions To Income

Synopsis

Account 806

Debits

Credits

  1. Amount required to decrease LIFO reserve for vehicles, used vehicles, and/or parts inventory during the current accounting year.

 

 

Remarks:

The calculation of LIFO Reserve and the supporting documentation required to substantiate the reserve amounts are complicated.  Any decision to adopt the LIFO method of inventory valuation and procedures adopted for accounting and financial reporting under LIFO should be made with the advice of competent tax counsel.