MEMO TOPIC:

You are currently the controller of a manufacturing company that currently uses the FIFO method of accounting for inventory in an economy that is experiencing high inflation. Although profits are higher this year than last year, you realize that the cost to replace inventory is also higher. You are considering changing accounting methods from FIFO to LIFO. What factors should you consider before making a change? Note any differences between reporting inventory using U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).