Unintended Consequences of LIFO Repeal: The Case of the Oil Industry
研究了废除后进先出存货计价法对公司价值的影响，发现废除后使用先进先出法的公司税后现金流可能增加，因为均衡产量下降、价格上升。
ABSTRACT This study examines the effect on firm value of repealing the last-in, first-out (LIFO) inventory method for tax purposes. Our model extends prior literature by determining quantities and prices in equilibrium, rather than specifying them exogenously. We find that LIFO repeal could increase the future after-tax cash flows of firms that had used LIFO, because the higher tax costs associated with FIFO result in lower equilibrium quantities and higher equilibrium output prices, which increase pretax cash flows. We illustrate our model by examining inventory methods used by firms in the oil industry.