International Financial Reporting Standards (IFRS) do not permit companies to use the LIFO method for inventory accounting. In its form 20-F, CNH discloses that it uses the first-in-first-out (FIFO) method to accounting for its inventory. Assume that prices that Caterpillar and CNH pay for inventory typically increase over time. In general terms, how does each companys inventory accounting method affect its balance sheet and income statement? How would the choice between LIFO and FIFO affect the statement of cash flows, if at all? What if prices typically decrease over time?