[vodrldnr]

when it comes to the topic of Dollar value LIFO

what is the meaning of base year and current year ???

and when problem says current year, what year exactly it refers to ???

[Substantive Testing]

This is the only topic in FAR that have made me feel stupid, and probably the only topic I cant help you with. I read that 10 times, and I didnt understand it, so I closed my eyes, cross my fingers and hoped I didn't get dollar value LIFO on the test. I cant do anything but wish you good luck in this subtopic.

[vodrldnr]

@Substantial assurance, steps for Dollar value lifo is ..

1. identify layer.

let say your BB inventory is 100 and ending balance is 120

the layer is 20.

2. find Price index

price index is EB of current year / EB of base year

3. price index X the layer => it gives you the LIFO that reflect price index ( the dollar value )

my question here is what exactly current year means ? if it is in the middle of YEAR 1, is current year is year 1, not year 0 ?

the reason why I am confused here is because the term current F/S in Prior period adj. they use current year F/S to describe the most recent F/S issued. then it means current year is Year 0 ( assume it is not comparative F/S).

but as to the “current ” in dollar value lifo, it seems like the “current ” means the year when F/S is being prepared YEAR 1 in my example ?

[Author]

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