All LIFO to FIFO changes in both cost-increasing and decreasing environments

CFA Level I FRA
#1

Hi! In a cost-increasing (cost per unit of inventory) environment, here’s a list of changes (from LIFO to FIFO ) to the financial statements as far as I could make out:

Balance sheet: add LIFO reserve to inventory, decrease cash by tax on LIFO reserve, increase retained earnings by LIFO reserve net of tax.

Income statement: subtract change in LIFO reserve from COGS, add tax on change in LIFO reserve to taxes.

First question: is this a comprehensive list? Are there any other changes that we need to be mindful of (e.g. deferred tax liability or tax payable or whatever)? Second question: would all changes for cost-decreasing environment be the exact opposite of the changes for a cost-increasing environment? i.e.

Balance sheet: subtract LIFO reserve from inventory, increase cash by tax on LIFO reserve, decrease retained earnings by LIFO reserve net of tax.

Income statement: add change in LIFO reserve to COGS, subtract tax on change in LIFO reserve from taxes.

I’m not sure if all the changes should be the exact opposite, so just want to confirm. Again, is this a comprehensive list? Any other items that I’d need to be aware of?

#2

Please be careful of your terminology.

You’re talking about _ cost _ increases, not price increases.

The curriculum (and most accounting texts) makes a clear distinction between costs (what we pay to our suppliers) and prices (what our customers pay to us).

#3

Thanks! I edited the question and title.

#4

(Bump) Anybody know the answer to this? Thanks