Frequently Asked Questions

IPIC FAQ

Why would a business choose LIFO accounting?
What types of businesses can benefit from LIFO accounting?
Which types of businesses would not benefit from LIFO accounting?
How can I elect LIFO?
Do I have to elect LIFO for all inventories?
Why would I want to defer income? Or, If it's only a deferral, why elect LIFO?
I'm on LIFO and will probably have less inventory at the end of this year than I did at the end of last year. How will this affect my LIFO reserve?
Is it possible to "turn" inventory too often, or too infrequently, to make LIFO a worthwhile alternative?
I'm already valuing my inventory at "Lower of Cost or Market". Why would I want to consider LIFO accounting?
How long do LIFO benefits last?
Every business in our corporate umbrella uses a different LIFO method for taxes. Isn't there one method that will work for all?
Is a published index better than an internally generated index?
How can I tell if IPIC would be the best solution for my business?
I'm concerned my LIFO calculations wouldn't pass an IRS audit. What can I do?
Is there a better, less time consuming way to calculate LIFO?
Does the IPIC method have to be used for all inventories on LIFO?
How quickly can I receive my final LIFO computation after year end?

Automotive FAQ

My inventory doubled. Why didn't my LIFO reserve double?
Can I have a decrease in inventory and still have an increase in LIFO reserve?
Can I have an increase in inventory and still have a decrease in LIFO reserve?

Why would a business choose LIFO accounting?
What types of businesses can benefit from LIFO accounting?
Which types of businesses would not benefit from LIFO accounting?
How can I elect LIFO?
Why would I want to defer income? Or, If it's only a deferral, why elect LIFO?
I'm on LIFO and will probably have less inventory at the end of this year than I did at the end of last year. How will this affect my LIFO reserve?
Is it possible to "turn" inventory too often, or too infrequently, to make LIFO a worthwhile alternative?
I'm already valuing my inventory at "Lower of Cost or Market". Why would I want to consider LIFO accounting?
How long do LIFO benefits last?