232 - Reserve for LIFO - New Vehicles

Current Assets

New Vehicles

Synopsis

Account 232

Debits

Credits

  1. The amount of adjustment needed to decrease the reserve (as determined from the LIFO valuation).

  1. The amount of adjustment needed to increase the reserve (as determined from the LIFO valuation).

 

 

Remarks:

This account is provided for those dealers adopting the last-in, first-out (LIFO) method of inventory valuation for new vehicles.

 

The actual inventory value should be reflected in new vehicle inventory accounts 230A, 230B, 231A, and 231B.

 

LIFO inventory valuation is very complicated and has very strict rules and regulations.  It is recommended that retailers only utilize this account under the direction of a proper tax authority and/or certified public accountant.

Note: