Can someone please clarify this - it is really annoying and treated differently in CFAI/Schweser. If inventory is LIFO, we must adjust the balance sheet to turn it into FIFO. If given a tax rate, adjustments are you would add the LIFO reserve to equity and this would be distributed between TC*LIFO reserve = Deferred Tax Liabilities and (1-Tc)* LIFO reserve = equity? (i.e. LIFO reserve = $100, Tc = 40%; add $100 to inventory with $40 in DTL and $60 to equity). If no tax rate is provided, we add the LIFO reserve to inventory with a similar increase to equity? Any clarification on this would be appreciated.
Isn’t this L1 stuff?
I hated this then… I and now, I hate it… but with a greater passion.
What LOS is this for?
Whenever you had to make adjustments to financial statements - this is often provided. Some of the Schweser questions/practice exam included this as a question.
Scheweser talks about this but im not sure its actually in the L2 curriculum…?