THE FUTURE OF LIFO: PROSPECTS FOR SURVIVAL UNDER THE PERSPECTIVES OF IFRS, VAS, AND US GAAP

Abstract

The disparity between US GAAP, IFRS, and VAS in cost flow assumptions, especially LIFO, presents a significant challenge for countries aiming for convergence. This paper reviews the rise and decline of LIFO in US GAAP, and examines the reasons for IFRS and VAS’s LIFO abandonment. On the grounds of the literature review method, this paper assesses the LIFO’s survival in accounting and questions whether the convergence purpose puts pressure on stopping LIFO among US companies. This research sheds light on the future of LIFO controversies and smoothing in terms of choosing accounting policies in Vietnam, internationally, and the large companies in the US.