Hello, everyone! I have come across many web portals which claim that LIFO reduces your tax burden... How does this mechanism work? And is LIFO allowed by AS in India, because IFRS doesn't allow it?
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Lifo method
Replies (2)
Suppose the purchase price of product on different dates are Rs 10, 11, 12 consecutively .In inflation your closing stock under LIFO is valued at a lower cost i.e Rs 10 ...so tax will be low
as per as-2 only FIFO or weighted avg is allowed.
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