I understand the conversion process (Lifo to Fifo), but would deeply appreciate some clarification regarding Lifo Cogs to Fifo Cogs.
Fifo Cogs = Lifo Cogs - (End Lifo reserve - Bgn Lifo reserve)
However, if there is no change in the LIFO reserve during the year, this implies that LIFO COGS and FIFO COGS were equal for the period…Can someone explain how this can be?? Does this mean that prices remained stable for the period, thus cogs were equal under both methods ? And the Inventory imbalance just carried over from a prior period
I guess what confuses me is that if there is a lifo reserve (thus LIFO End Inv does not equal FIFO End Inv), doesn’t that mean that the inventory balances include different prices, so why do those difference prices not flow into COGS, how can LIFO COGS equal FIFO COGS when LIFO and FIFO inventory aren’t equal.