Somebody help me… LIFO reserve should be added to the inventory if a firm uses LIFO accounting. One of the CFA questions asks to restate it but doesn’t say anything about LIFO liquidation or declining inventory level. However, in the answer, it restated in the B/S as well as in the Income Statement. My understanding was we should restate it in the IS only if there is liquidation or declining in inventory level. The answer says assuming the LIFO reserve did not change, LIFO reserve needs to be adjusted in the IS. Confused… Secone one is customer advance. In the CFAI book it says it is not debt but unearned income (page 258). One of the CFA question answer says it should be included in adjusted debt…