DOLLAR-VALUE LIFO: LEGITIMATE OR NOT?
Accounting practices are the accountant's instruments for measurement and communication. Some practices attain general acceptance because they enhance the accuracy of measurement or reduce equivocation in the information presented. Others are dictated by the structure of particular environments. All may reflect, to some extent, the demands of practicality, expediency, technical and economic necessity, compromise, and diverse other influences. This paper is concerned with the forces contributing to the development of one accounting practice, the dollar-value technique for implementing the last-in, first-out inventory method, and with its legitimacy. Many of the accounting practices in the United States reflect the monetary postulate because measurement techniques have been insufficiently refined to permit other approaches. Recent improvement in the techniques of processing data has made more sophisticated measurements possible. More meaningful accounting data can be generated. But before this can be accomplished, accountants will have to abandon or modify some of their cherished but illogical practices which often lead to inaccurate and misleading measurements.
- DOI
- 10.2308/tar-7103182
- Volume
- 38 (2)
- Pages
- 270-277
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref