why is lifo accounting banned in most of the world 
lifo is banned under the international financial reporting standards that are used by most of the world because it minimizes taxable income that only occurs when inflation is a factor but governments still don t like it it also can make a company s inventory valuations inaccurate in addition there is the risk that the earnings of a company that is being liquidated can be artificially inflated by the use of lifo accounting in previous years 56the bottom linemost companies use the first in first out fifo method of accounting to record their sales the last in first out lifo method is suited to particular businesses in particular times that is it is used primarily by businesses that must maintain large and costly inventories and it is useful only when inflation is rapidly pushing up their costs it allows them to record lower taxable income at times when higher prices are putting stress on their operations 