What is a LIFO reserve? The amount of income taxes saved when using LIFO costing instead of FIFO costing. The difference between inventory cost using UIFO costing in the balance sheet and cost of goods sold in the income statement using LIFO costing. The difference between ending inventory using LIFO costing compared to FIFO costing The extra cost a company incurs as a result of using LIFO costing compared to FIFO costing in periods of rising prices