Question $13$

Which of the following is a disadvantage of the LIFO inventory method?

The company pays higher income taxes when inventory costs are rising

The company has to use this method under IFRS, even if it does not want to

The reported balance sheet inventory figure contains old and unrealistic cost figures after companies use LIFO for a long period of time

Companies who use LIFO for their books cannot use it on their tax returns, meaning they have to track their inventory two ways.