CPA Firm Resources & Offerings

LIFOPro provides complimentary resources to CPA firms to simplify LIFO for all parties involved & help their clients obtain the LIFO solutions they deserve. LIFOPro’s complimentary resources enables CPA firms to accomplish and/or obtain the following:
  • Offer the most valuable inventory related tax savings strategies while eliminating costly overhead required to develop & maintain in-house LIFO expertise and resources
  • Educate firm members & clients about LIFO via complimentary discovery and training calls hosted by LIFOPro
  • Confidently & effectively advise & consult with clients about electing LIFO
  • Streamline LIFO election due diligence and ensure best practices are implemented by leveraging our complimentary LIFO Election Benefit Analysis, training and support
  • Simplify your firms LIFO audit procedures, minimize compliance work and place reliance on the LIFO experts to provide LIFO support and advice to your clients
Hundreds of CPA firms including the majority of the top 20 firms indirectly partner with LIFOPro so they can provide or enhance their ability to offer LIFO  tax planning strategies & solutions without incurring the costs and resources to do so. Under an indirect partnership, LIFOPro directly engages with clients to provide them turnkey LIFO solutions. This allows firms have a LIFO subject matter expert they can count on to provide them with all the resources needed to quickly and effectively identify the best LIFO tax planning strategies, and to provide them with the training required to support their clients who use LIFO. Such a partnership structure ensures CPA firms and their clients have a mutual LIFO resource, and precludes your clients from pursuing LIFO solutions from competing firms. Many of the top CPA firms directly partner with LIFOPro to create a wholesale-retail LIFO service model. All aspects of the LIFO calculation are outsourced to LIFOPro when directly partnering with us. Under a direct CPA firm partnership model with LIFOPro, firms can maximize LIFO service revenue, and expand their client’s LIFO reach and usage much more effectively and efficiently than they could on their own.

CPA Firm Partnership Playbook - New Elections

  • Table of Contents
    CPA Firm + LIFOPro Partnership Playbook Presentation Slide Deck - New Elections


    Section Slide(s)
    Step 1: Choose Partnership Format 3
    Step 2: Year End LIFO Election Planning 4
    Step 3: Client Outreach 5
    Step 4: LIFO Election Benefit Analysis & Due Diligence 6 – 7
    Step 5: Onboarding, Calculation, Deliverables & Implementation 8
    Turnkey Outsourcing Solutions Process Flow Chart 9 – 10
    Sample LIFO Election Benefit Analysis Report Excerpts 11
    Sample LIFOPro Fee Quote Excerpts 12
    Sample LIFO PDF Report Package Excerpts 13
    Frequently Asked Questions 14
    Resources 15
  • Step 1: Choose Partnership Format
    • Standard turnkey outsourcing solution engagement assumes LIFOPro will manage all aspects of the LIFO calculation
    • LIFOPro offers a variety of partnership formats to best suit each CPA firm’s desired goals and their client’s wants/needs
    • Most common partnership formats include:
      • Direct partnership: CPA firm directly engages with LIFOPro (wholesale – retail model)
        • Designed for CPA firms seeking to generate or maximize revenues by building/enhancing a turnkey outsourcing solution LIFO service line
        • CPA firm engages with LIFOPro to obtain turnkey LIFO solution on behalf of their client at a wholesale or discounted fee
        • CPA firm resells LIFO solution to their client at a retail rate
        • Communication, document receivables/deliverables & billing occurs primarily or exclusively between CPA firm & LIFOPro
        • Typically involves a formal consulting agreement and/or statement of work
      • Indirect format: Client directly engages with LIFOPro, but provides free resources/support to CPA firm
        • Designed for CPA firms seeking to offer or enhance their ability to provide LIFO as a tax planning strategy without incurring costs to do so
        • Allows CPA firms to partner with a LIFO subject matter expert and resource who can also serve as their client’s 3rd party LIFO service provider
        • CPA firm typically provides an introduction or referral to LIFOPro, recurring involvement is based on the client & firms wants/needs
        • CPA firm & clients can place reliance on LIFOPro’s expertise to provide best practices feedback, training & support on all issues related to LIFO
        • LIFOPro engages directly with client regarding document receivables/deliverables & billing
      • Referral format: CPA firm introduces client to LIFOPro
        • Designed for CPA firms who lack LIFO expertise/resources, but has clients with LIFO needs
        • Precludes CPA firm clients from seeking a LIFO solution from a competing firm, and ensures clients aren’t lost to competing firms who offer LIFO solutions
        • Can also be formatted where LIFOPro pays CPA firm a consulting fee to compensate firms for time spent on introductions/referrals
        • CPA firm typically provides an introduction or referral to LIFOPro, but has minimal amount of involvement on a recurring basis
        • LIFOPro allows flexibility in the design of the partnership format to include a hybrid of the above formats
        • Multiple partnership formats can be used within a single firm to best suit needs of each client or firm location
  • Step 2: Year End LIFO Election Planning
    • Use LIFOPro’s complimentary resources to identify the best LIFO candidates for the upcoming year end:
    • Top LIFO Election Candidates List Overview
      • Lists are designed to allow firms to locate a commodity or industry that most closely matches their client’s product mix
      • Both lists contain the following fields for each commodity/industry:
        • Good LIFO Candidate
          • Yes value indicates the commodity/industry is a “Good LIFO Candidate” because the historical inflation metrics have favored the long-term use of LIFO
          • No value indicates the commodity/industry is not a “Good LIFO Candidate” because the historical inflation metrics have been unfavorable for the long-term use of LIFO
        • 2023 Top Election Candidate
          • Yes value indicates a current year LIFO election is recommended because the tax benefits from electing LIFO in 2023 is expected to be greater than or equal to the historical averages; must be a good LIFO candidate to also be a 2023 LIFO election candidate (commodities/industries that aren’t good LIFO candidates will never be a top election candidate)
          • No values are dependent on the good LIFO candidate status:
            • Good LIFO Candidate – Indicates a LIFO election should be deferred to a future period because although the commodity/industry is a Good LIFO Candidate, the tax benefits from electing LIFO in 2023 is expected to be less than the historical averages OR electing LIFO in 2023 will INCREASE taxable income
            • Not a Good LIFO Candidate – Indicates LIFO should never be used for the commodity/industry regardless of the
        • Year to date & historical average annual inflation rates – YTD rate can be used to estimate election year taxable income reduction and/or tax savings from LIFO
        • Inflation Frequency
          • Measured using Bureau of Labor Statistics Price Indexes over each of the last 20 years for the 12M ended December for each commodity/industry
          • Historical inflation frequency assists in estimating how often LIFO will create a tax benefit; also a valuable metric for measuring potential risk of using LIFO
          • Good LIFO candidates must have inflation frequency rate of greater than 50%
          • Higher/highest inflation frequencies represent better/best LIFO candidates because LIFO will likely create tax benefits more often than those with lower/lowest inflation frequencies
        • Year to Date vs. 20 Year Annual Average Inflation Multiplier
          • Measured using the year to date inflation rate & dividing it by the 20 year average annual inflation rate. 2023 Top Election Candidates must have an inflation multiplier of ≥ 1
          • Highest multiplier values represent the best 2023 LIFO election opportunities since they represent tax benefits that are much higher than the historical averages
  • Step 3: Client Outreach
    • The following outreach steps should be performed for clients who are 2023 Top LIFO Election Candidates:
      • Client should be informed that meaningful tax savings could be obtained from electing LIFO in 2023 (may be useful to include their estimated taxable income reduction or tax savings from LIFO calculated using LIFOPro’s Good LIFO Candidate List)
      • Client should be advised they can attend a complimentary discovery call to learn more about LIFO and the opportunity
      • Clients may also be advised they can obtain a complimentary LIFO election benefit analysis to obtain valuable due diligence resources (some clients will know enough about LIFO to defer/decline attending a discovery call
    • Outreach/analysis sequence is flexible to best suit the wants/needs of your firm/client
      • LIFOPro offers to host a complimentary discovery call with the client and/or CPA firm (presentation can be tailored to exclude any discussion regarding fees if CPA firm is engaging LIFOPro directly & using wholesale-retail model)
      • Some firms/clients may prefer to obtain the LIFO election benefit analysis prior to having discovery call or may opt out of having a discovery call altogether
      • Firms are welcome to host their own discovery calls with clients without LIFOPro present
      • LIFOPro’s discovery call presentation slide deck: How LIFO Works & LIFOPro’s Offerings
    • Outreach steps will likely depend on the CPA firm’s partnership format with LIFO
      • Firms directly engaging with LIFOPro (wholesale-retail model) may internally manage the outreach/analysis process to preclude the need for LIFOPro to communicate with their clients
      • Firms indirectly partnering with LIFOPro will likely connect their client with LIFOPro so the firm or LIFOPro can coordinate scheduling/hosting a discovery call and remain involved/aware regarding the progress of the LIFO analysis process
      • Other firms may prefer for LIFOPro to manage all aspects of the outreach/analysis process and will only need to provide an introduction or referral to their client/LIFOPro
  • Step 4: LIFO Election Benefit Analysis & Due Diligence
    • Clients who are 2023 Top LIFO Election Candidates & interested in exploring a LIFO adoption should obtain a complimentary LIFO Election Benefit Analysis
    • LIFOPro will deliver the client’s analysis report & fee quote to the firm and/or client within 1 week or receipt of required docs.
    • Analysis & fee quote documentation requirements
      • Non-dealerships
        • Current period & prior year end’s item detail or stock status report containing the following fields:
          • Item number (UPC/SKU) and description
          • Stages of production and/or hierarchies (if applicable; hierarchy examples include categories/class/type/line etc.)
          • Quantity on hand or weight
          • Current period item/unit cost
        • Completed benefit analysis questionnaire (enclosed in benefit analysis document request list)
        • Download our Non-dealer document request list here : LIFO Election Benefit Analysis Document Request List
      • Dealerships: Download, complete & return the applicable questionnaire to LIFOPro
      • Other dealerships (RV, powersports etc.): Contact LIFOPro for document requirements OR IF AVAILABLE, provide the same documentation listed above for non-dealerships
    • Benefit Analysis Report Overview
      • Comprehensive case study delivered as PDF report to assist CPA firm & client with the LIFO due diligence process
      • Series of historical calculations made to forecast company-specific long-term LIFO tax benefits
      • LIFOPro’s proprietary inflation scoring system used to model company-specific expected risks vs. rewards of LIFO
      • Comparative 2023 year end LIFO calculation results provided to provide accurate estimate of election year LIFO tax benefit
      • Includes LIFOPro’s findings & recommendations regarding whether a LIFO election should be made/deferred, and the most beneficial submethods to use if a LIFO election recommendation is made
      • Also includes a comprehensive Appendix containing LIFO election essentials, accounting for LIFO & FAQs
    • Fee Quote Overview
      • Provided at the same time the client’s benefit analysis report is delivered
      • Includes services to be provided, deliverables timing, document requirements & detailed fee quote breakdown
      • Provides separate breakdowns for the election year vs. recurring fee amounts
      • Provides separate breakdowns for the various LIFO submethod alternatives (if applicable; i.e., internal vs. external indexes)
      • Also provides separate line items for optional services
    • Due Diligence Overview
      • LIFOPro offers to schedule/host a call with the firm and/or client to discuss the benefit analysis results, fee quote & next steps at the time of delivering the client’s benefit analysis report
      • LIFOPro will collaborate as needed after benefit analysis & fee quote delivery to provide additional due diligence resources
      • LIFOPro offers to provide clients & CPA firms with our best practices feedback & offer additional analysis as needed
      • CPA firms directly engaging LIFOPro may choose to discuss results & fees with client directly, and may choose to only share excerpts of the benefit analysis to the client (LIFOPro will deliver analysis report & fee quote to CPA firm only in these cases)
  • Step 5: Onboarding, Calculation, Deliverables & Implementation
    • Onboarding: LIFOPro will deliver the following items within 3 business days of requesting to move forward with an engagement:
      • Engagement letter or statement of work
      • Final document request & new client questionnaire (Excel file containing items below & sample templates)
        • Document request
          • Contains remaining list of items required to prepare/deliver client’s final LIFO report package
          • Document request items typically includes year end inventory reports if not already provided & Often will include a trial balance or balance sheet schedule with applicable breakdowns for inventory-related subledger accounts
        • New Client Questionnaire
          • Includes questions for deliverable deadlines to ensure timely LIFO report package delivery
          • Questionnaire also includes questions required to prepare/deliver client’s IRS LIFO election forms package
      • Required documents & completed questionnaire must be returned to LIFOPro prior to CPA firm/client receiving final deliverable
    • Calculation: LIFOPro will complete the calculation immediately upon receiving the items listed in the document request
      • LIFOPro software Excel data input sheet prepared using client documentation
      • Client’s Excel data input sheet loaded into LIFOPro software & LIFO calculation completed
      • Standard LIFO PDF report package generated using LIFOPro software & LIFOPro reviews reports prior to delivery (reports can also be provided as Excel files)
    • Deliverables: LIFOPro will electronically deliver the following to the client/CPA firm upon receipt of the above documents:
      • LIFO PDF report package (and/or Excel reports) – Contains all information required for financial reporting, audit/review & tax purposes
      • IRS LIFO election forms package – Required to be attached to client’s year end tax return (first year only)
    • Implementation: Client can complete all remaining LIFO-related tasks upon receiving the deliverables listed above, including:
      • Client records LIFO journal entry using amounts provided in LIFO report package
      • Client/CPA firm prepares LIFO-related tax return entries on year end tax return & attaches IRS LIFO election forms package to return
  • Turnkey Outsourcing Solutions Process Flow Charts

    Turnkey Outsourcing Solutions Process Flow: Election Year (First Year as Client)

    Turnkey Outsourcing Solutions Process Flow: Recurring

  • Sample LIFO Election Benefit Analysis Report Excerpts

    Figure 1. 20 Year Pro Forma External Index LIFO Calculation Summary (IPIC Method)

    Figure 2. Current Year LIFO Calculation Estimate & Inflation Measurement Comparison

    Figure 3. Good LIFO Candidate & LIFO Election Recommendations

    All criteria have been met for Sample Company to be considered a good LIFO candidate & for a LIFO election to be recommended for the 2023 year end.

    Figure 4. LIFO Submethods Recommendations

    Figure 5. 20 Year Pro Forma IPIC LIFO Taxable Income & Tax Liability Reduction Schedule

    Figure 6. Bureau of Labor Statistics Historical Inflation Rates: Most Predominant Categories Applicable to Product Mix

  • Sample LIFOPro Fee Quote Excerpts

  • Sample LIFO PDF Report Package Excerpts

  • Frequently Asked Questions
    • What are LIFOPro’s turnkey outsourcing solutions costs?
      • First year including IRS LIFO election forms preparation – Fees start as low as $1K
      • Recurring (optional) – Fees start as low as $500/year
    • What is LIFOPro’s standard turnaround time?
      • LIFO election benefit analysis report & fee quote: 1 week or less upon receipt of the required documents, but can be expedited as quickly as 1 – 2 day turnaround time as needed
      • Engagement letter & document request: 2 – 3 business days of receiving engagement request, but can be expedited to be provided the same day as needed
      • LIFO report delivery: 1 week or less upon receipt of the executed engagement letter & requested documents, but same-day turnaround time can be provided as needed. Interim estimates are typically made within 1 – 2 business days, but also can be expedited if need be.
    • Will LIFOPro deliver LIFO report packages and/or invoices to a specific or multiple parties even though the engagement is only with the CPA firm/client?
      • LIFOPro will deliver the LIFO PDF report package and invoices to all parties who desire to receive it, including various company and CPA firm contacts
      • LIFOPro will deliver the LIFO PDF report package and invoices to only the CPA firm for firms who are directly engaging with LIFOPro
    • What are LIFOPro’s billing/payment policies?
      • Billing
        • LIFOPro will invoice the client within 1 – 3 business days of LIFO report package delivery
        • Standard payment term is due upon receipt, but can be modified as needed
        • LIFOPro’s engagements are for a one-year period, but allow for optional annual renewal
        • LIFOPro’s recurring fee stated in the engagement is guaranteed to remain the same for a 3-year period, meaning the engagement letter is designed to survive for the first four years of the engagement (one year for first year fees stated in engagement & 3 years for the recurring fees)
      • Payment: Physical check & electronic check (e-check offered via CPACharge free of charge) or Credit card (offered via CPACharge; 2.95% processing fee applies)
  • Resources

CPA Firm Partnership Playbook - For Clients On LIFO

  • CPA Firm LIFO Opportunities
    • Make a profit center out of LIFO, maximize LIFO services revenue/profitability or expand LIFO offerings by:
      • Licensing the LIFOPro software & reselling LIFO calculation services to clientele
      • Outsourcing client’s calculations to LIFOPro at a wholesale cost & reselling our finished product to clients
      • Earn referral fees for clients or prospects introduced to LIFOPro whom become clients
      • Referring clients to LIFOPro for complimentary analysis, reviews, software licenses or turnkey outsourcing solutions
    • Establish recurring services revenue annuity by offering clients the ability to reduce taxable income in perpetuity from using LIFO
    • Maintain competitive edge over other firms in the LIFO offerings they can provide to clients & prospects
    • Offer most valuable inventory-related tax incentive to clients even if they lack required resources to make LIFO calculations
    • Strengthen client relationships & build goodwill by providing more tax incentives to clients & prospects not already using LIFO
    • Offer solutions that make being on LIFO as simple on possible
    • Complimentary LIFO election benefit analysis & LIFO calculation, methods & best practices reviews for clientele & prospects
    • Our first year & recurring service costs are a fraction of the amount of the only other specialty LIFO services provider
    • We are headed by the leading LIFO expert whom is a Deloitte alumni, CPA & LIFOPro software architect
    • Our firm has more combined LIFO expertise than any of the Big Four CPA firms
    • Flexible services engagement & software license structures built to fit the exact needs of your firm, clients & prospects
    • Minimize control & audit risk & maximize calculation accuracy
    • Best LIFO practices feedback, resources, training & support
  • CPA Firm LIFO Opportunities: Turnkey Outsourcing Solutions
    • CPA firms can completely outsource all aspects of their client’s LIFO calculation to LIFOPro, including:
      • Front & back end of all dollar-value LIFO calculations
      • Delivering LIFOPro reports that include comprehensive calculation documentation & all amounts for recording journal & tax return entries
      • Performing interim LIFO estimates & ad-hoc projections
      • 263A UNICAP costs calculated & integrated into reports
      • LIFO-related accounting method changes, including layer history rebasing, pool combinations & splits
      • IRS forms 970, 3115 & statements preparation
    • Generate LIFO services revenue
      • Wholesale/retail
        • CPA firm engages directly with LIFOPro to outsource their client’s LIFO calculation
        • LIFOPro collaborates exclusively with CPA firm to complete calculation, perform services, deliver reports & issue invoice
        • LIFOPro bills CPA firms at a wholesale cost in order for them to cover their time & efforts related to providing their client’s LIFO services
        • CPA firm provides any value added services related to LIFO calculation & bills client at a retail cost
      • Referral fees
        • LIFOPro pays CPA firms consulting fees to compensate them for the following services:
        • Introducing clients & prospects to LIFOPro
        • Services provided to client on a recurring basis related to their LIFO calculation
    • Flexible engagement structures
      • Work directly with LIFOPro, together with LIFOPro & client or have client work directly with LIFOPro on the following:
        • Sending inventory documentation for calculation to LIFOPro
        • LIFO calculation services delivery i.e. LIFO reports
        • Billing
  • CPA Firm LIFO Opportunities: Software
    • Maximize LIFO services profit margins by replacing time-consuming manual procedures with software automation
    • Expand & grow the number of clients that CPA firms can provide LIFO services to
    • Offer clients/prospects a way to automate making in-house calculations at a minimal cost
    • Greatly simplifies LIFO for both the CPA firm & the client when software is used regardless of who makes the calculation
    • Guarantee LIFO calculation accuracy & minimize control risk
    • Eliminate complex, error-prone manual Excel calculations & replace them with & user-friendly, audit-proof documentation
    • Easily identify good LIFO candidates & quickly quantify current year tax LIFO savings for companies not on LIFO
    • Quickly determine tax LIFO savings maximization & optimization opportunities for companies already on LIFO
    • Robust reporting platform provides comprehensive documentation
    • Unlimited in-person, online & over-the phone U.S.-based support
  • Common LIFO Issues for CPA Firms
    • In general
      • Limited or nonexistent LIFO expertise within the firm
      • LIFO expertise concentrated in one location, causing firms in other locations to have different objectives & procedures related to LIFO
      • Inefficient processes & lack of automation limits CPA firm’s ability to expand the LIFO offerings provided to clients/prospects
      • Can’t compete with other firms who have superior LIFO capabilities
      • Extensive time & effort spent by firm on making calculations for clients reduces profitability
      • CPA firm can’t perform client’s LIFO calculation because the CPA firm is the client’s auditor (i.e. independence issue)
    • Clients/prospects not on LIFO
      • Difficult for CPA firm to obtain a sense of who would be a good LIFO candidate
      • Difficult for CPA firm to quantify the potential tax benefits for the ones suspected to be good LIFO candidates
      • Client/prospect may be incapable of making their own LIFO calculations in-house
      • Client/prospect may be resistant to further complicating their inventory costing methods
      • Client/prospect may decide costs outweigh the benefits & not elect LIFO without resources such as software or turnkey outsourcing solutions
      • Above issues cause CPA firm to avoid pursuing opportunities such as LIFO for clients/prospects
    • Clients/prospects on LIFO
      • Client’s manual calculations are impossible to audit because firms don’t have LIFO software to verify accuracy
      • Company & CPA firm are unlikely to properly detect & prevent calculation errors
      • Above issue causes client to have increased LIFO inherent & control risk, thereby causing auditors to have to work harder & spend more time reducing detection risk to an acceptable level
      • Above issue causes audit work & fees related to client’s LIFO calculation to be higher than they really need to be
      • Client/prospect may decide to terminate LIFO without resources such as software or turnkey outsourcing solutions
  • Common Issues for Clients & Prospects on LIFO
    • In general
      • Administrative burden of manually completing calculations without the assistance of software or a one-size fits all LIFO template
      • Difficulty performing interim estimates & accurately forecasting the impact of LIFO between year ends
      • Inability to accurately predict material change in LIFO reserve causing big surprises at year end
      • Large companies with multiple subsidiaries on LIFO using different costing methods, calculation methodologies or accounting systems
      • Lack of knowledge & understanding of how LIFO works
    • Suboptimal LIFO submethod usage
      • Are those that reduce the tax LIFO savings that could potentially be achieved, including:
        • Specific goods or unit LIFO: Causes 50 – 75% reduction in tax LIFO savings that could be achieved if dollar-value LIFO was being used
        • Using internal instead of external indexes: Often generates materially lower tax LIFO savings compared to if external indexes were used (i.e. IPIC LIFO method using BLS CPI/PPI)
        • Limited LIFO election scope: Can cause companies to miss out on additional tax deferral that they would have otherwise wanted if they would have had access to LIFO solutions that automates calculations or eliminates the work altogether
        • Using more LIFO pools than required: Will almost always cause reduced LIFO tax savings when CY. Vs. PY inventory balances decrease. Issue compounds itself as time goes on & can create materially reduced tax LIFO savings when decreases are applied to LIFO pools with high historical average inflation
    • Manual calculation issues
      • Errors
        • From our experience in reviewing thousands of calculations, errors are not a matter of if, but when will they occur when performed manually
        • Errors are so easily made when made when performed manually because of factors including:
        • No one-size fits all formula exists to apply the correct math to decrement calculation errors (by far the most common error made)
        • Excel formulas used for last year’s calculation may be different than last year’s calculation if there was an increment last year & decrement this year & vice versa
        • Excel formulas used may not have been properly updated
        • No template exists for verifying LIFO calculation accuracy for all periods
        • Using a “layers remaining” only LIFO carryforward schedule that provides inadequate level of detail for subsequent period’s calculation
        • Limited or inadequate manual LIFO calculation policies & procedures documentation
        • Employee turnover causing gaps in manual LIFO calculation procedure knowledge & new person responsible for calculation to be inadequately trained
        • Will always increase inherent & control risk because error probability for manual vs. automated calculation is exponentially higher
        • Creates IRS audit exposure
  • Common LIFO Errors
    • In general
      • Decrement calculation errors
      • Failure to incorporate standard cost variances into calculation
      • Improper allocation of general ledger inventory balances to LIFO pools
      • Wrong current year cost used for LIFO calculation (i.e. general ledger inventory balance per the books gross of LIFO reserve. Typically FIFO, average cost or EAC)
      • Including non-LIFO related inventory reserves & writedowns in tax LIFO calculation (allowed for GAAP but not for tax)
      • 263A UNICAP costs calculation errors such as using current year absorption ratio to calculate UNICAP costs when there is a decrement (prior period(s) absorption ratio should be used when there is a decrement)
      • Failure to establish correct LIFO pools
      • Failure to establish correct IPIC pooling method pools (IPIC pooling method only)
      • Failure to apply IPIC pooling method 5% method test every three years (IPIC pooling method only)
    • Internal Indexes
      • Improper item definition
      • Excluding new items from index calculation or setting new & preexisting item current year index equal to one another
      • Including items in inflation calculation that are not a part of LIFO election scope & vice versa
      • Using price books for item/unit cost
      • Failure to review exceptions such as items with prior/base year item/unit costs but missing current year item/unit costs
      • Failure to review outliers with abnormal current vs. prior year cost changes
    • External Indexes (IPIC method using CPI/PPI)
      • Improper item definition
      • Including items in inflation calculation that are not a part of LIFO election scope & vice versa
      • Using far less BLS categories than required
      • Assigning finished goods PPI codes to raw materials
      • Assigning raw materials PPI codes to WIP or finished goods (IRS Regs. require for finished goods PPI code to be assigned to WIP items)
      • Using inappropriate BLS table (for example, using Table 11 industry-based PPI instead of Table 9 commodity-based PPI. IRS Regs. require Table 9 to be used)
      • Incorrectly applying 10% method math
      • Failure to apply the correct substitute index for unpublished, deleted or discontinued BLS categories
  • LIFO Opportunity Identification Procedures

  • LIFO Opportunity Identification Methods
    • Provide LIFOPro with client’s LIFO calculation documentation to provide any of the following (all complimentary):
      • LIFO Calculation, Methods & Best Practices Review
      • Turnkey Outsourcing Solutions Cost Estimate
      • LIFOPro software cost estimate
  • LIFO Opportunity Identification Documentation Requirements
    • Front-end documentation – Inflation index calculation detail documentation from the last period closed. Depends on the type of inflation measurement source used & is as follows:
      • Internal Indexes: typically will be inventory item detail report containing the following fields:
        • Quantity on hand
        • CY & PY or base year (BY) item/unit cost
        • CY & PY/BY extended cost
      • External Indexes (aka IPIC LIFO using BLS CPI/PPI): may be inventory item detail report, but may also be a summarized schedule of inventory balances at cost by BLS CPI/PPI code/category
    • Back-end documentation – LIFO carryforward schedule from the last period closed. may include historical documentation for all prior periods such as:
      • Inventory balances at cost (i.e. FIFO, average cost, EAC etc.)
      • Current year and/or cumulative indexes
      • Inventory balances at base year costs
      • LIFO layers
      • Increments/decrements
      • LIFO inventory, reserve and/or expense (income)
  • Turnkey Outsourcing Solutions: What’s Included
    • LIFO-PRO manages all aspects of a company’s LIFO calculation, including:
      • Reviewing historical LIFO calculation documentation
      • Creating LIFO-PRO software database file using historical LIFO calculation documentation
      • Correcting prior period LIFO calculation errors (if applicable)
      • Annually sending inventory documentation request describing data required for LIFO calculation
      • Organizing & preparing period end inventory documentation for completing LIFO calculation
      • Bureau of Labor Statistics (BLS) Consumer/Producer Price Index (CPI/PPI) category assignments
      • Maintenance & storage of current & prior period LIFO calculation documentation
      • Compiling & delivering a complete set of LIFO reports electronically (PDF and/or Excel file(s))
    • Offer additional services that can be bundled with the above, including:
      • Interim LIFO estimates & tax provisions
      • Separate LIFO calculations for companies with differing Book & Tax LIFO methods
      • §263A UNICAP cost calculation (using company-provided absorption ratios)
      • Accounting method changes & IRS forms preparation
      • LIFO Election Benefit Analysis (complimentary)
      • LIFO Calculation, Methods & Best Practices Review (complimentary)
  • How our Services Work: First Year Only (Companies on LIFO)

  • How Our Services Work: All Periods

  • Software Features
    • Works for all dollar-value LIFO situations, including:
      • Link-chain (current vs. prior year) or Double-extension (current vs. base year)
      • Retail or cost LIFO
      • Single or dual indexes
      • Internal or External inflation index measurement source (External index aka IPIC method using CPI/PPI)
      • Single or multiple LIFO pools
      • Multiple entities with separate LIFO calculations
      • Different Book & Tax LIFO methods (i.e. separate calculations made for financial reporting & tax purposes)
    • Completely automates calculation, estimates, projections, documentation & reporting for all industries other than auto dealers
    • Internal Index Module:
      • Reconstructs prior or base period costs for new items by automatically calculating inflation rates of pre-existing items by category, class, department, product group/line, profit center or stage of production
      • Automatically looks up prior year item/unit cost for internal index calculations where client documentation only includes current year item cost
    • External Index Module
      • BLS CPI/PPI inflation indexes automatically downloaded for IPIC LIFO calculations
      • Automatically assigns IPIC LIFO pools & performs IPIC Pooling Method 5% test
      • Performs 10% method calculations
      • Automatically performs interim estimates
    • Reporting Module
      • Provides comprehensive documentation, including all amounts required for recording GL entries & making GAAP disclosures
      • Dozens of user-friendly report formats, including current year only, all years, pool-by-pool & all pools combined
      • All reports can be printed or saved as Excel or PDF files
      • Integrates §263A UNICAP costs with user-provided absorption ratios
      • Includes consolidated reports for multiple entities
      • Quickly make ad-hoc projections for an unlimited range of scenarios
  • Software: What’s Included
    • On-premise and/or cloud software access & usage license for unlimited users
    • LIFO-PRO software database file containing company’s historical LIFO documentation (created by LIFO-PRO team using company-provided data)
    • Includes the option to outsource your next LIFO calculation to LIFOPro at no additional cost in the first year of your software license to provide users extra time to do any the following:
      • Complete current period calculations ahead of reporting/filing deadline without having to rely on manual procedures presently employed in-house
      • Make parallel calculations to compare your company’s in-house vs. LIFOPro software’s results
      • Allow IT department time to test and/or approve software usage
      • Become familiarized with LIFOPro software’s reports
      • Implement new procedures related to using the software to complete LIFO calculations
      • Install the software on user’s PCs
      • Learn usage steps & receive any training needed from LIFOPro
    • LIFO-PRO software version updates
    • LIFOPro software User’s guide, usage steps & reference/training material
    • Unlimited phone, online or on-premise support & training
    • Readily available best LIFO practices expertise and feedback
    • 40 hours of GAAP financial statement & IRS audit support
    • Also includes LIFOPro reviewing calculations for reasonableness
    • On-premise
      • Software installed on user’s local or network drive
      • Can be installed on unlimited number of devices & used by an unlimited number of users
      • Works on all Windows operating systems
      • Software data files can be saved on network drive to enable all users to access & use the software
      • Users can have LIFO calculations reviewed for reasonableness by sending their company’s software database files to LIFOPro
      • Includes all software version updates
    • Private cloud
      • Company issued dedicated LIFOPro software virtual machine (VM) accessed via LIFOPro’s virtual private network (private cloud)
      • User provided with login credentials to access LIFOPro private cloud & software VM
      • Works on any PC with internet access
      • User’s software LIFO database file containing calculation documentation stored on LIFOPro’s private cloud
      • All files are secured & backed up
      • Unlimited users can be issued login credentials, including IT staff or auditors
      • Allows for users to easily have LIFO calculations reviewed for reasonableness since their software data files are stored on LIFOPro’s network
      • Also allows users to easily troubleshoot any software issues or answer any software related questions
      • No version updates required since software VM is maintained by LIFOPro
  • How the Software Works Summary: First-time Use (Companies on LIFO)

  • How the Software Works: Software Install & Setup
    • LIFOPro team builds the following software data files for user:
    • bhist.dat – LIFO database file containing company’s historical LIFO calculation documentation. Subsequent period’s LIFO calculation documentation will also be saved to this file.
    • COINFOW.dat – Company specific settings, including company name, last period closed, number & name of LIFO pools, period end dates, LIFO submethods settings & report format options
    • InternalIndexInfo.dat – Current year index calculation settings (aka front-end calculation) as well as information regarding data input file(s) loaded by user for the last calculation made
    • On-premise software users provided URL link & password to download the following:
    • LIFOPro software Installation & setup file
    • LIFOPro software data files listed above
    • On-premise software users can install LIFOPro software to either a local or network drive
    • On-premise software users can save data files to their LIFOPro software program folder or local/network drive
    • Private cloud users provided login credentials to access their LIFOPro software Virtual Machine (LIFOPro software already installed on virtual machine, meaning no software installation & setup required by user)
    • Private cloud users already will already have company software data files saved to their Virtual Machine

  • How the Software Works: Opening the Software

  • How the Software Works: Usage Steps Summary
    • Preparation & Inputs
      • User prepares data input sheet(s) Excel file(s) containing inventory cost data required for calculation
      • User loads data input sheet file into LIFOPro software
    • Calculation
      • Software automates completing both the current year inflation index & LIFO calculation
      • Software generates current year index calculation summary & detail reports
      • Software LIFO database file saved to include results of last period closed upon user closing year end
      • User can make low, mid or high level interim estimates & ad-hoc projections as needed using current period data or forecasted inventory levels & indices loaded or entered by user (or prior period data loaded by software)
    • Reporting
      • All LIFO calculation reports (back end) updated to include results of last calculation made
      • Over a dozen different report formats, including all amounts required for recording GL journal & tax return entries
      • All reports can be printed or saved as Excel or PDF files
      • Consolidates calculations for multiple entities into a single report
      • Integrates §263A UNICAP costs using absorption ratios loaded by user
  • Software Trial
    • Try the software for 90 days free of any commitment or obligation
    • Accessed via the internet using LIFO-PRO’s private cloud, meaning no installation required
    • Can be set up for an unlimited number of trial users
    • Full functionality, meaning all features are enabled
    • Preconfigured for plug & play use to trial with your choice of data:
      • Client Data – comes preconfigured with the following:
        • LIFO-PRO imports your client’s actual historical LIFO documentation into the software
        • Sample software input data & templates for running LIFO calculations
        • Also can use your client’s current period input data for running LIFO calculations
      • Sample Data – comes preconfigured with the following:
        • Software database file containing sample historical LIFO calculation documentation
        • Sample software input data & templates for running LIFO calculations
        • Also can use your client’s current period input data for running LIFO calculations
  • Complimentary Offerings
    • LIFO Election Benefit Analysis Report: In-depth study performed to quantify the tax savings of LIFO. Includes the following:
      • 20 year pro forma LIFO calculation
        • Historical average annual inflation rate
        • Historical inflation frequency
        • Cumulative tax savings that would have occurred if LIFO was elected 20 years ago
      • Summary of findings
        • If good LIFO candidate criteria was met based on pro forma calculation results
        • Estimated current year taxable income reduction from LIFO (if applicable)
        • Recommendation regarding if LIFO should be adopted for the current year end (if applicable)
    • LIFO Calculation, Methods & Best Practices Review Report: Comprehensive review for companies on LIFO. Includes the following:
      • LIFO calculation & methods review
        • Historical calculation documentation imported into LIFOPro software to verify calculation accuracy
        • Methods reviewed to identify tax savings maximization strategies & verify GAAP & tax compliance
      • Proposed vs present method pro forma LIFO reserve calculation comparison
      • Best practices feedback & recommendations
        • Steps to correct calculation errors & tips for preventing future errors (if applicable)
        • Steps to achieve methods compliance & minimize audit risk
        • Tax LIFO savings maximization strategies
        • Suggestions for simplifying calculation procedures
        • Estimates for outsourcing LIFO calculation or using our software

  • Service Organization Control Report (SOC 1 Type II Report)
    • Independent CPA firm issues SOC 1 Type 2 report to LIFO-PRO annually (formerly known as SAS 70 Report)
    • Prepared in accordance with AT-C section 320, Reporting on an Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting
    • Report on the fairness of the presentation of management’s description of the service organization’s system and the suitability of the design and operating effectiveness of the controls to achieve the related control objectives included in the description throughout a specified period
    • Copy of this report is available to software users & their auditors/CPA firms
    • Allows clients & their CPA firms to confirm that an independent auditor annually reviews & tests LIFO-PRO’s software and internal controls
    • Provides added assurance for companies who are audited as it confirms that the software being relied upon to make LIFO calculations has been independently tested & audited
    • Providing auditors with this report often reduces substantive testing related to LIFO calculation since using software to automate calculation eliminates the chances of manual errors from occurring, thereby lowering control risk
  • Pricing & Terms: Software

    • Software license leased for a one year period with optional annual renewal
    • Price based on value in-use & annual license costs begins at $250/year
    • Includes LIFOPro building your company’s software database file containing historical LIFO calculation documentation
    • Includes the option to outsource your next LIFO calculation to LIFOPro at no additional cost in the first year of your software license to provide users extra time to do any the following:
      • Complete current period calculations ahead of reporting/filing deadline without having to rely on manual procedures presently employed in-house
      • Make parallel calculations to compare your company’s in-house vs. LIFOPro software’s results
      • Allow IT department time to test and/or approve software usage
      • Become familiarized with LIFOPro software’s reports
      • Implement new procedures related to using the software to complete LIFO calculations
      • Install the software on user’s PCs
      • Learn usage steps & receive any training needed from LIFOPro
    • Comes with the assurance of a Service Organization Control Report (SOC) issued to LIFOPro by independent CPA firm
    • Includes unlimited phone, email or in-person support & training
    • Includes LIFOPro reviewing calculations for reasonableness
    • Can be installed on-premise or accessed on LIFOPro’s private cloud
    • Operating System Requirements:
      • Both on-premise & cloud versions work on all PCs with Windows 7 or Windows 10
      • Minimal operating system requirements for both versions & minimal storage space requirements for on-premise (no storage requirements for private cloud)
  • Pricing & Terms: Turnkey Outsourcing Solutions

    • Pricing is based on company size & engagement scope & recurring annual fees start as low as $500/year
    • Terms are for a one-year period & are free of multi-year commitments
    • Fixed annual cost that’s guaranteed to remain the same amount for at least 4 years
    • LIFO-PRO reports delivered electronically including comprehensive documentation of all LIFO amounts required to record adjusting general ledger & tax return entries
    • All reports can be delivered as either Excel/PDF files
    • Also includes:
      • Up to three interim LIFO estimates using most recently published BLS inflation indexes & prior year end product mix & inventory balances
      • Unlimited report revisions
      • Up to 40 hours of GAAP & IRS audit support
  • Brochures & Downloads
  • Learn More or Get Started

    Note: You will receive a request form submission confirmation email immediately after submitting your request. You will need to open this email to access the requested items. Contact us by phone at 402-330-8573 M-F 8am - 5pm CST or email us at

2023 Good LIFO Election Candidate List & Identification Tool


    2023 Good LIFO Election Candidate List & ID Tool
    LIFOPro annually publishes our Top LIFO Election Candidates list to identify the best opportunities for obtaining tax benefits from adopting LIFO for the upcoming year end. The list uses price indexes published by the Bureau of Labor Statistics which are used to calculate a series of current and historical inflation metrics. These externally-sourced inflation metrics are plugged into LIFOPro’s proprietary grading system and scoring criteria in order to develop and publish our top LIFO candidates list each year. The ultimate goal of the list is to allow companies and CPA firms to quickly identify the best LIFO election opportunities and to easily calculate the estimated tax benefit that could occur from electing LIFO. This list is also often used as a prerequisite to obtaining a free LIFO Election Benefit Analysis from LIFOPro (for example, if a company or CPA firm identifies that their company or client is on this list, LIFOPro would recommend obtaining a complete benefit analysis from us free of cost/obligation). This list offers the most comprehensive, objective and reliable means of quickly identifying the best LIFO candidates, the top 2023 LIFO election candidates and the information required to quickly estimate the election year taxable income reduction & savings from LIFO

    Top 2023 LIFO Election Candidates List and Identification Tool 2023 Top LIFO Opportunities & Strategies Guide

    Who’s in the List?

    LIFOPro offers two separate lists of top LIFO candidates, which are as follows:

    • Commodity-based list (Bureau of Labor Statistics Producer Price Index, Table 9) – This list uses the same groupings utilized by some companies to calculate inflation for LIFO purposes (aka as the IPIC method; see our blog to learn more about the IPIC method: How the IPIC Method Could Maximize Your LIFO Reserve). This means the same BLS PPIs included in this list could be used for an actual LIFO calculation. The PPIs are developed by the BLS and are sourced from thousands of survey respondents (all domestic producers).  The classification system is organized as a hierarchical structure by 15 major groupings, and the following subgroups in descending order of aggregation:
      • Major commodity groupings (at the 2-digit level of aggregation)
      • Subgroups (at the 3-digit level)
      • Product classes (4-digit level)
      • Subproduct classes (5- and 6-digit level)
      • Item groupings (7-digit level)
      • Individual items (8-, 9-, and 10-digit levels)
    • Industry-based list (PPI Table 11) – This list is included because the Table 11 PPIs are North American Industry Classification System (NAICS) codes that directly translate into IRS Primary Business Activity (PBA) codes. This list is a catch-all in terms of connecting a company our best LIFO candidates list since all taxpayers are required to report their PBA code on their tax return. Furthermore, this list may provide a simpler means of identifying good LIFO candidates since a company could have multiple commodity-based PPIs applicable to their product mix. Although the BLS also has a hierarchy for their Table 11 industries that’s similar to their commodity-based Table 9 list, LIFOPro’s Industry based list only includes the 6-digit NAICS codes since the IRS PBA codes are all 6 digits.

    What is a Good LIFO Candidate?

    LIFOPro’s proprietary grading system and scoring criteria was designed for purposes of developing the most comprehensive LIFO case study and providing the most reliable and understandable findings and recommendations. Since the benefits of LIFO are primarily driven by inflation but is also an accounting method that’s intended to be used in perpetuity, LIFOPro developed various inflation measurement metrics that sought to answering the following questions:

    • How often has there been inflation (inflation frequency)? If there’s been inflation in each of the past 20 years in a given industry, then it’d be a great LIFO candidate because the historical results suggest that LIFO will almost always create a tax benefit in the future. In contrast, if there’s been inflation in 9 of the past 20 years in a different industry, then it would likely not be a good LIFO candidate because it’d suggest that LIFO will increase taxable income more often than it’ll create a tax benefit. Some of the best LIFO candidates are those with high inflation frequency since the intended purpose of being on LIFO will most often be achieved. Furthermore, companies that are highly risk averse with the lowest risk appetites can be confident that LIFO is a great long-term tax savings strategy if they have high historical inflation frequency since there’s mostly upside and negligible downside from LIFO.
    • How much inflation has there been historically? Also important in a consideration to elect LIFO is the amount of inflation historically experienced since there needs to be at least a certain amount for LIFO to yield a long-term tax benefit. In the auto dealer & supermarket industries, LIFO has historically yielded an average annual inflation rate of between 1% – 2%. Although these figures may not appear meaningful, the benefits of LIFO will become material over time since those industries also have high inflation frequency. Industries such as raw materials commodities (oil/gas, chemicals, metal) have the highest long-term average annual inflation rates, which means they offer the most reward from using LIFO. With that being said, raw materials commodities also often have lower inflation frequency than industries with lower historical inflation rates such as auto dealers and supermarkets, so there is higher risk from using LIFO within these industries.

    How is a Good LIFO Candidate & Good LIFO Election Candidate Determined?

    • LIFOPro’s Good LIFO Candidate Scoring Criteria
      • High inflation frequency: Must have inflation in more than half of the last 20 years (11 or more). Best LIFO candidates have high inflation frequency because the more often inflation is expected to occur, the higher the likelihood that LIFO acts as annuity & the lower the likelihood of deflation/LIFO recapture
      • Historical Average Annual Inflation Rate of 1% or greater: Using 20 year average annual inflation rate (or 3/5/10 year)
      • At least $2M – $5M of inventory: A much smaller company could benefit from electing LIFO, but LIFOPro set a $2M – $5M range for prospective clients because our experience has been the tax benefits of LIFO are far greater than the cost most often when these three criteria are met. With that being said, LIFOPro has many clients with as little as $500K of inventory (LIFOPro software licenses begin at $250 and outsourcing solutions begin at $400).
    • LIFOPro’s Good LIFO Election Candidate Recommendation Criteria: Must meet the good LIFO candidate criteria listed above & have a 2023 year end (or election year) inflation rate that’s greater than or equal to the historical average annual inflation rate (for example, if all good LIFO candidate criteria listed above are met, the 2023 year end inflation is projected to be 5% and the 20-year average annual inflation rate was 2%, then a 2023 LIFO election would be recommended)

    Can I Quickly Estimate the Tax Benefits from Electing LIFO This Year?

    Ignoring the complexities of a LIFO calculation and other factors that could affect the final result, a heavily-relied upon approach for estimating the LIFO reserve change in any given year is provided below (LIFO reserve = difference between inventory at cost i.e, FIFO or average cost and the LIFO inventory value; the year over year change in the LIFO reserve is known as LIFO expense when it increases & LIFO income when it decreases. The LIFO expense and reserve is always the same amount in the election year since the prior year LIFO reserve balance is always zero in the year of election). The formula shown below can be put to immediate use by obtaining the prior year end’s inventory balance and the inflation rates provided in this blog.

    Quick Election Year LIFO Tax Benefit Formula

    • Current year taxable income reduction from LIFO formula (also known as LIFO expense): Prior year inventory balance * Current year inflation rate
    • Current year tax liability reduction from LIFO (aka tax deferral or after-tax cash savings from LIFO): Current year LIFO expense * Current year combined federal and state tax rate

    Election Year LIFO Tax Benefit Example

    • Inputs
      • Prior year end inventory balance: $10M
      • Current year inflation rate: 5%
      • Current year tax rate: 30%
    • Outputs
      • Current year LIFO expense: $10M * 5% = $500K
      • Current year after-tax cash savings from LIFO: $500K * 30% = $150K

    Top 2023 Year End LIFO Candidates by BLS PPI Table 9 Major Commodity Groupings (2-digit) and Subgroups (3-digit)

    Top 2023 Year End LIFO Candidates by Commodity: All Groupings

    BLS PPI CodeBLS Commodity Category Description9M Ended Sep. '23 (YTD)12M Ended Sep. '2312M Ended Dec. '223Y Annual Avg.5Y Annual Avg.10Y Annual Avg.20Y Annual Avg.Inflation Frequency '04 - '23Inflation Frequency RateYTD vs. 20Y Average Inflation Multiplier
    0211Bakery products3.1%5.2%14.2%6.9%4.6%2.9%3.1% 19 of 20 95%1.02
    021107Other sweet goods, excluding frozen6.4%11.2%20.5%9.8%7.4%4.3%3.8% 18 of 20 90%1.70
    021108Soft cakes, excluding frozen6.8%4.8%12.9%9.9%6.7%3.4%3.9% 15 of 20 75%1.75
    021121Cookies, crackers, and related products2.8%2.8%7.5%3.9%2.8%1.4%1.8% 16 of 20 80%1.57
    0214Cereal and pasta products5.1%7.6%15.6%10.5%6.7%2.7%3.4% 15 of 20 75%1.50
    021409Cereal and mill products, other than flour6.5%9.3%13.0%10.4%6.6%2.6%3.3% 15 of 20 75%1.96
    022Meats, poultry, and fish6.7%-0.6%-3.3%9.5%5.2%2.4%2.9% 14 of 20 70%2.33
    0221Meats11.1%8.1%-0.8%11.1%6.4%3.0%3.1% 15 of 20 75%3.56
    022101Beef and veal products, fresh or frozen21.4%19.2%-6.1%15.0%7.8%4.3%3.8% 12 of 20 60%5.71
    022104Pork products, fresh, frozen, or processed, except sausage2.9%-2.7%0.3%7.0%4.1%0.2%2.0% 12 of 20 60%1.50
    022105Other meats, fresh, frozen, or canned5.8%3.5%6.0%9.3%6.5%3.4%3.2% 15 of 20 75%1.85
    022203Young chickens, including bulk, chilled, frozen, whole, and in parts4.1%-9.9%-6.0%9.9%4.6%1.6%2.5% 12 of 20 60%1.66
    022208Canned, cooked, smoked or prepared poultry18.4%-14.0%-22.0%2.8%0.7%0.1%1.0% 13 of 20 65%18.75
    023105Other milk products2.6%3.6%10.9%5.4%3.9%1.9%2.3% 14 of 20 70%1.11
    024Processed fruits and vegetables9.1%12.9%18.2%11.1%6.9%4.2%4.0% 17 of 20 85%2.28
    0241Canned fruits and juices10.8%12.6%14.9%10.0%5.6%3.9%3.9% 16 of 20 80%2.80
    024101Canned fruits, excluding baby foods5.2%6.1%18.0%9.3%6.8%4.2%4.0% 15 of 20 75%1.29
    024102Canned and fresh fruit juices, nectars, and concentrates14.4%16.8%13.3%10.6%5.2%3.7%3.8% 16 of 20 80%3.79
    0242Frozen fruits, juices and ades11.2%14.2%-0.1%12.6%3.5%3.9%4.0% 13 of 20 65%2.77
    0244Canned vegetables and juices3.6%8.9%24.0%10.8%8.4%3.8%3.4% 16 of 20 80%1.06
    0245Frozen vegetables15.0%18.7%24.5%14.0%8.8%5.2%4.5% 18 of 20 90%3.34
    024502Frozen potato products (French-fried, patties, puffs, etc.)26.8%31.7%32.4%19.2%11.2%6.3%5.7% 18 of 20 90%4.68
    0248Dried and dehydrated food7.6%12.0%12.0%8.3%5.3%3.7% 17 of 20 85%2.05
    025Sugar and confectionery6.6%6.8%8.8%6.4%4.2%2.2%3.0% 16 of 20 80%2.19
    0252Raw cane sugar and sugar cane mill products and byproducts9.1%12.6%14.3%11.1%9.2%4.6%3.8% 13 of 20 65%2.37
    0253Refined sugar products and byproducts7.7%13.3%8.8%8.2%6.5%3.2%3.3% 14 of 20 70%2.31
    0254Confectionery materials20.9%16.6%17.0%14.5%8.9%3.1%3.8% 16 of 20 80%5.55
    02550302Nonchocolate-type confectionery products4.6%6.5%11.6%6.7%5.1%3.0%2.8% 19 of 20 95%1.62
    02550305Other confectionery-type products4.8%4.7%10.1%5.9%4.0%3.4%2.5% 13 of 18 72%1.95
    026Beverages and beverage materials4.2%5.7%10.2%6.3%4.4%2.7%2.7% 20 of 20 100%1.58
    026104Wines, brandy, and brandy spirits2.2%8.1%8.7%4.6%3.4%2.1%1.9% 18 of 20 90%1.18
    0262Soft drinks6.5%5.0%12.3%9.3%6.8%4.0%3.1% 20 of 20 100%2.07
    02620609Soft drinks, non-carbonated9.5%2.4%7.0%8.2%5.8%2.7%3.2% 16 of 20 80%2.98
    0263Packaged beverage materials7.8%18.2%18.8%9.5%5.7%2.8%3.4% 14 of 20 70%2.29
    026301Coffee (whole bean, ground, & instant)7.2%18.7%20.5%9.8%5.9%2.9%3.6% 14 of 20 70%2.01
    026303Tea in consumer packages, exc. canned ice tea14.0%15.9%7.0%7.5%4.2%2.4%2.4% 17 of 20 85%5.79
    0264Other beverage materials5.9%6.3%14.1%10.8%8.0%4.6%3.8% 18 of 20 90%1.57
    0285Frozen specialty food2.6%4.3%16.7%7.5%4.3%2.2%2.2% 14 of 20 70%1.19
    02850109Frozen cakes, pies, and other pastries5.6%7.2%13.0%6.8%5.0%2.9%3.4% 18 of 20 90%1.66
    02850111Frozen dinners (beef, pork, and poultry pies) and nationality foods, incl. frozen pizza1.9%4.0%14.1%6.7%3.2%1.4%1.4% 12 of 20 60%1.32
    028601Prepared sauces, excluding tomato-based sauces and sauces comprised of 20 percent or more meat11.0%12.9%12.8%8.8%5.7%3.1%2.7% 17 of 20 85%4.08
    02890148Dry mix food preparations2.0%4.0%7.3%3.9%2.8%1.9%1.7% 15 of 20 75%1.19
    02890172Chips (potato, corn, etc.)10.3%14.0%15.7%10.9%7.4%3.5%3.9% 18 of 20 90%2.66
    029402Pet food6.4%7.3%14.1%9.5%6.5%3.6%4.2% 19 of 20 95%1.53
    0337Greige broadwoven fabrics3.5%1.9%8.4%7.1%4.4%2.3%2.4% 14 of 20 70%1.45
    0346Coated fabrics, not rubberized3.5%3.3%13.4%8.1%5.4%3.1%3.2% 17 of 20 85%1.11
    038Apparel & other fabricated textile prods2.2%3.2%5.2%4.9%3.1%2.2%1.8% 18 of 20 90%1.23
    0381Apparel1.2%1.5%4.9%3.2%1.8%1.3%1.2% 16 of 20 80%1.02
    038104Miscellaneous apparel and accessories3.7%4.1%7.3%5.8%4.3%3.0%2.6% 19 of 20 95%1.41
    0383Industrial and other fabricated products3.8%5.1%6.4%7.5%5.2%3.0%2.6% 18 of 20 90%1.43
    03830351All other fabricated textile products, excluding trimming and findings3.9%5.8%5.7%7.3%4.9%2.7%2.1% 16 of 20 80%1.86
    04Hides, skins, leather, and related products2.0%2.7%3.2%7.1%0.2%-1.9%0.5% 12 of 20 60%4.12
    043Footwear1.4%5.8%11.1%6.1%4.2%3.0%2.7% 18 of 20 90%2.13
    0431Men's nonathletic footwear2.0%8.3%13.8%7.4%4.9%3.3%3.0% 20 of 20 100%2.73
    044Other leather and related products4.9%5.1%4.2%4.1%2.9%2.4%2.0% 20 of 20 100%2.41
    0441Luggage and small leather goods6.8%6.9%2.5%3.4%2.4%2.1%1.9% 18 of 20 90%3.54
    0445Leather and leather-like goods, n.e.c.2.7%3.1%6.3%4.9%3.4%3.0%2.3% 20 of 20 100%1.18
    05Fuels and related products and power5.1%-11.9%12.1%20.2%6.0%1.6%4.1% 13 of 20 65%1.24
    056Crude petroleum (domestic production)20.2%-1.4%9.1%37.8%3.2%-2.1%6.0% 13 of 20 65%3.35
    057Petroleum products, refined18.8%-6.1%10.2%32.7%8.3%1.2%6.4% 13 of 20 65%2.93
    0571Gasoline37.1%7.1%-5.5%32.3%6.1%0.0%5.1% 12 of 20 60%7.23
    0572Kerosene and jet fuels13.6%-7.2%37.2%43.1%8.3%1.2%7.9% 14 of 20 70%1.73
    0637Biological products, including diagnostics4.8%5.1%0.5%5.1%4.3%2.8%3.0% 19 of 20 95%1.59
    063807Vitamin, nutrient, and hematinic preparations3.6%4.4%5.3%3.3%2.2%2.5%2.1% 19 of 20 95%1.70
    0671Soaps and detergents8.2%10.4%11.7%8.7%5.4%2.9%3.0% 17 of 20 85%2.73
    0672Polish and other sanitation goods2.2%2.6%6.3%4.5%3.7%3.1%2.5% 18 of 20 90%1.02
    0675Cosmetics and other toilet preparations4.5%5.3%6.4%4.1%2.8%2.0%1.5% 17 of 20 85%2.95
    067503Perfumes, toilet waters, and colognes3.0%4.1%3.9%4.1%2.1%1.6%1.0% 14 of 18 78%2.90
    067505Dentifrices7.6%7.6%6.4%4.7%4.8%2.8%2.4% 11 of 15 73%3.10
    067514Creams, lotions and oils, excluding shaving, hair, and deodorant5.4%7.1%7.5%4.4%3.0%1.5%1.4% 17 of 20 85%3.82
    067515Other cosmetics and toilet preparations4.6%4.6%4.8%4.0%2.5%1.9%1.0% 14 of 20 70%4.73
    0712Tires, tubes, tread, & repair materials2.3%4.3%15.2%8.4%5.4%2.3%3.5% 15 of 20 75%1.24
    0723Laminated plastic sheets, rods, and tubes4.1%3.4%12.9%8.2%5.4%3.3%2.9% 17 of 19 89%1.43
    07290197All other reinforced and fiberglass plastics products7.4%10.0%15.7%12.0%7.6%4.1%4.4% 18 of 20 90%1.69
    08210112Wood window units4.5%2.1%17.6%10.5%8.1%5.6%4.0% 19 of 20 95%1.13
    0849Miscellaneous wood products4.2%0.7%6.8%5.6%3.5%2.7%2.0% 17 of 20 85%2.07
    104103Transportation equipment hardware3.6%4.8%2.4%11.0%6.9%3.6%2.5% 12 of 20 60%1.42
    1042Hand and edge tools2.7%4.5%7.7%5.2%4.3%2.5%2.6% 19 of 20 95%1.03
    10540218Lavatory and sink fittings3.7%4.2%11.0%6.1%5.8%3.8%3.4% 18 of 19 95%1.08
    106Heating equipment1.2%4.7%10.8%11.0%7.6%4.8%4.4% 20 of 20 100%1.06
    1061Steam and hot water equipment8.9%9.7%12.7%12.2%7.9%4.8%4.9% 19 of 20 95%1.84
    1063Other heating equipment, non-electric, including parts3.5%10.8%15.6%12.0%8.8%5.1%4.1% 20 of 20 100%2.64
    1079Prefabricated metal buildings7.1%2.9%-4.0%15.6%8.7%6.7%6.7% 15 of 20 75%1.06
    1081Bolts, nuts, screws, rivets, and washers4.3%6.6%15.1%11.9%9.6%5.1%4.4% 18 of 20 90%1.49
    108102Externally threaded fasteners, except aircraft types6.6%4.1%11.7%10.6%8.9%4.9%4.3% 17 of 20 85%1.53
    1083Lighting fixtures2.9%4.0%7.0%6.0%5.0%3.1%2.5% 20 of 20 100%1.16
    108905Other metal products2.0%2.5%5.5%5.9%4.0%1.9%1.9% 16 of 20 80%1.04
    11Machinery and equipment3.1%4.4%9.1%6.4%4.5%2.6%1.8% 17 of 20 85%1.72
    111409Parts for farm machinery, for sale separately3.2%3.8%8.1%11.2%7.0%3.9%3.2% 17 of 20 85%1.01
    112Construction machinery and equipment5.8%6.1%8.7%8.2%6.4%3.6%3.4% 20 of 20 100%1.71
    112ATractors and attachments, ex. parts7.4%6.0%5.1%7.4%6.4%3.3%3.2% 19 of 20 95%2.32
    112A03Construction machinery for mounting (excluding parts, winches, snow clearing attachments)10.1%10.1%7.9%9.0%6.3%3.6%3.2% 18 of 20 90%3.14
    112A04Tractor shovel loaders (skid steer, wheel, crawler, and integral design backhoes)5.4%5.5%10.0%7.6%6.8%3.4%3.3% 19 of 20 95%1.64
    112BPower cranes, draglines, & shovels (excavators) (incl. surface mining equipment) (excl. parts)8.3%8.8%11.1%9.3%7.5%3.6%3.0% 19 of 20 95%2.78
    112B05Power cranes, draglines, & shovels (excavators) (incl. surface mining equip.) (excluding parts)8.3%8.8%11.1%9.3%7.5%3.6%3.0% 19 of 20 95%2.78
    112CMixers, pavers, and related equipment (excluding parts)8.9%10.3%15.6%13.4%9.8%5.6%4.0% 18 of 20 90%2.20
    112DOff-highway, equipment, ex. parts6.6%7.7%10.3%8.0%6.8%3.3%3.6% 20 of 20 100%1.81
    113Metalworking machinery and equipment4.4%5.8%8.1%6.7%4.5%2.8%2.4% 19 of 20 95%1.84
    1132Power-driven handtools, including parts and attachments11.6%11.6%6.1%9.6%6.2%4.0%2.5% 18 of 20 90%4.60
    113302Resistance welders, components, accessories, and electrodes3.5%3.5%9.2%6.8%4.6%2.3%3.2% 16 of 20 80%1.10
    113304Gas welding and cutting equipment, parts, attachments, and accessories4.5%4.5%8.2%5.9%3.9%2.1%2.4% 17 of 20 85%1.90
    113306Other welding equipment, components, and accessories (excluding arc, resistance, and gas)2.4%2.4%9.6%5.9%4.2%2.9%2.3% 19 of 20 95%1.05
    1134Industrial process furnaces and ovens5.2%5.8%11.3%8.4%6.1%3.7%2.8% 19 of 20 95%1.82
    1135Cutting tools and accessories2.7%4.6%6.2%4.4%3.4%2.3%2.2% 20 of 20 100%1.24
    113501Small cutting tools2.5%4.5%5.5%3.7%2.9%2.1%2.2% 18 of 19 95%1.14
    113505Other machine tool attachments and accessories7.4%10.6%10.5%9.3%6.7%4.1%2.9% 17 of 19 89%2.51
    1136Abrasive products2.1%5.9%9.6%8.0%5.6%3.6%3.3% 20 of 20 100%1.78
    1137Metal cutting machine tools2.9%4.1%3.3%3.8%3.0%1.8%2.2% 19 of 20 95%1.34
    1138Metal forming machine tools12.4%12.4%5.3%7.0%5.6%3.2%2.9% 18 of 20 90%4.29
    1139Tools, dies, jigs, fixtures & ind. molds4.2%5.5%7.9%6.0%3.7%2.0%1.4% 15 of 20 75%3.04
    113901Special tools, dies, jigs, and fixtures2.5%3.0%5.5%4.9%3.5%2.0%1.4% 16 of 20 80%1.78
    113903Industrial molds and mold boxes6.9%9.3%11.2%7.8%4.0%2.0%1.4% 14 of 20 70%4.96
    113AMetalworking machinery n. e. c.8.5%8.5%8.1%6.6%4.2%2.9%2.2% 17 of 18 94%3.84
    114General purpose machinery and equipment4.8%6.0%13.4%9.6%6.7%4.2%3.8% 20 of 20 100%1.26
    1141Pumps, compressors, and equipment5.8%7.1%16.0%9.8%6.5%4.2%4.0% 20 of 20 100%1.46
    1142Elevators, escalators, and other lifts5.3%5.9%5.0%8.9%6.5%4.2%2.9% 17 of 20 85%1.79
    1143Fluid power equipment10.1%10.6%11.4%10.1%7.1%4.1%4.0% 20 of 20 100%2.54
    114301Fluid power pumps and parts4.0%4.9%7.9%5.7%4.1%2.5%2.9% 20 of 20 100%1.37
    114304Fluid power hose and tube fittings35.1%35.0%15.9%19.3%12.4%6.4%5.4% 19 of 20 95%6.54
    1144Industrial material handling equipment2.8%4.7%9.6%9.0%6.2%4.1%3.9% 19 of 20 95%1.21
    11440216Bulk material handling conveyors and conveying systems7.5%8.9%13.6%13.7%9.6%5.6%4.2% 19 of 20 95%1.79
    11440357Work trucks not fitted with lifting & handling equipment, electric or non-electric4.1%4.5%10.4%10.2%6.5%4.1%3.8% 10 of 12 83%1.07
    1145Mechanical power transmission equipment2.5%5.1%15.2%8.6%6.2%3.6%3.9% 18 of 20 90%1.31
    1146Scales and balances4.0%6.6%10.1%8.9%6.4%4.8%3.5% 20 of 20 100%1.15
    1147Air purification equipment and industrial and commercial fans and blowers2.1%3.1%10.3%7.6%5.5%3.8%3.3% 19 of 20 95%1.00
    1148Air conditioning and refrigeration equip4.0%4.3%19.3%12.6%8.7%5.2%3.9% 19 of 20 95%1.02
    1149Miscellaneous general purpose equipment4.2%5.6%10.9%7.8%5.6%3.6%3.9% 20 of 20 100%1.10
    114902Metal valves, except fluid power3.3%5.8%14.9%7.9%6.0%4.3%4.9% 20 of 20 100%1.20
    114908Filters and strainers16.2%15.6%5.8%10.9%7.0%3.9%3.8% 19 of 20 95%4.28
    114911Other miscellaneous general purpose equipment2.8%3.7%7.4%5.2%4.0%2.5%2.5% 19 of 20 95%1.12
    116Special industry machinery and equipment3.3%5.9%11.1%9.0%6.0%3.6%2.5% 19 of 20 95%1.30
    1161Food products machinery3.4%5.2%10.5%7.4%5.4%3.7%3.6% 20 of 20 100%1.45
    116104Commercial food products machinery (except packaging and cooking equipment)3.5%6.0%10.3%7.1%5.0%3.4%3.1% 19 of 20 95%1.12
    1163Sawmill and woodworking machinery6.8%7.4%10.6%9.0%6.3%5.5%3.8% 19 of 20 95%1.81
    1164Paper industries machinery4.4%4.9%9.8%6.6%4.6%2.8%2.5% 20 of 20 100%1.78
    1166Other special industry machinery3.1%6.9%11.5%11.0%7.4%4.0%2.1% 16 of 20 80%1.45
    116606Miscellaneous special industry machinery3.4%7.7%12.4%12.5%8.3%4.5%2.0% 14 of 20 70%1.72
    1167Packing, packaging, and bottling machinery and parts7.1%10.0%9.8%9.4%5.2%4.0%3.3% 19 of 20 95%2.15
    117Electrical machinery and equipment1.3%2.1%7.1%4.4%3.1%1.7%0.8% 12 of 20 60%1.61
    1171Wiring devices4.5%5.9%11.2%14.7%9.5%4.9%4.5% 18 of 20 90%1.00
    117101Current-carrying wiring devices24.2%25.5%6.9%13.7%8.4%4.2%3.7% 18 of 20 90%6.49
    11710143Current-carrying switches for electrical circuitry (including vehicular switches)4.4%5.2%6.1%6.1%4.0%4.2%3.3% 16 of 20 80%1.34
    11710144Current-carrying wire connectors for electrical circuitry4.0%5.2%9.2%8.2%5.4%2.5%2.9% 17 of 20 85%1.35
    1172Integrating and measuring instruments3.6%4.4%4.4%2.6%1.8%0.8%1.1% 14 of 20 70%3.41
    1173Motors, generators, motor generator sets5.3%5.6%10.9%9.5%6.2%3.4%3.5% 18 of 20 90%1.53
    1175Switchgear, switchboard, industrial controls equipment3.3%6.7%20.4%11.2%7.5%4.1%3.6% 18 of 20 90%1.84
    1176Communications and related equipment and miscellaneous electronic systems & equipment1.8%1.7%4.3%3.2%3.3%2.0%1.1% 16 of 20 80%1.60
    117822Switches, mechanical (electronic applications)7.4%0.3%14.3%8.2%6.3%3.5%2.4% 18 of 20 90%3.02
    117824Connectors for electronic circuitry4.1%7.1%15.5%7.7%5.8%3.3%2.6% 19 of 20 95%1.55
    118Miscellaneous instruments4.5%6.4%9.6%5.9%4.2%2.9%2.3% 20 of 20 100%1.93
    1181Automatic environmental controls for monitoring residential, commercial, and appliance use5.5%6.5%4.8%6.0%4.1%2.7%2.1% 18 of 20 90%2.69
    1182Industrial process control instruments3.0%5.9%13.7%6.5%4.5%3.0%2.8% 20 of 20 100%1.05
    1184Fluid meters and counting devices9.0%8.6%10.3%8.4%5.6%4.2%3.4% 20 of 20 100%2.62
    1185Engineering and scientific instruments3.4%7.4%7.7%5.4%4.3%3.3%2.7% 20 of 20 100%1.28
    1186Measuring instruments and lenses4.2%4.7%6.6%4.3%3.2%2.2%1.7% 19 of 20 95%2.52
    1189Measuring & controlling devices, n.e.c.4.5%8.2%12.7%6.6%4.5%2.9%1.8% 16 of 20 80%2.53
    119Miscellaneous machinery4.0%5.5%6.5%4.9%3.6%2.0%2.3% 17 of 20 85%1.74
    1192Mining machinery and equipment5.7%7.8%11.5%11.0%8.9%5.1%5.1% 20 of 20 100%1.12
    1194Internal combustion engines6.1%6.6%7.0%5.0%3.4%1.8%1.6% 17 of 20 85%3.91
    1195Machine shop products3.5%4.1%4.9%4.4%3.3%2.0%2.3% 19 of 20 95%1.52
    1197Turbines and turbine generator sets5.5%6.0%2.2%3.9%3.9%1.7%2.5% 14 of 19 74%2.22
    1212Wood household furniture7.0%6.5%7.2%8.6%5.7%3.6%3.0% 20 of 20 100%2.34
    1221Wood office furniture and store fixtures2.9%4.0%11.8%8.4%5.7%3.6%2.7% 20 of 20 100%1.08
    1224Commercial furniture and fixtures, n.e.c.2.2%5.3%13.6%10.4%7.8%4.7%3.4% 18 of 20 90%1.57
    124101Household cooking appliances4.3%6.9%13.2%10.7%7.5%3.7%2.7% 16 of 20 80%1.56
    1245Portable residential lighting fixtures, including parts and accessories5.1%5.7%8.3%7.8%7.1%4.5%3.5% 17 of 20 85%1.47
    1257Speakers and commercial sound equipment2.2%2.5%7.1%6.4%4.3%2.2% 15 of 20 75%1.00
    126Other household durable goods1.8%3.6%6.9%6.6%4.4%2.8%2.2% 20 of 20 100%1.67
    1265Mirrors (decorated and undecorated)9.4%3.6%6.9%5.5%3.3%2.8%2.1% 14 of 18 78%4.58
    13Nonmetallic mineral products4.9%5.9%13.2%8.7%6.0%4.2%4.1% 19 of 20 95%1.21
    1313Other finished glassware4.2%4.0%4.9%4.7%3.5%3.0%1.7% 16 of 20 80%2.41
    132Concrete ingredients and related products8.6%8.9%12.2%8.3%6.4%5.1%4.6% 19 of 20 95%1.86
    132101Construction sand, gravel and crushed stone8.5%8.3%11.9%8.1%6.6%5.1%4.9% 20 of 20 100%1.74
    1322Cement, hydraulic9.0%10.7%13.0%8.7%5.9%5.4%4.1% 18 of 20 90%2.20
    133Concrete products6.8%9.0%14.9%9.8%7.1%5.3%4.5% 18 of 20 90%1.49
    1331Concrete block and brick7.7%7.8%13.7%8.8%6.8%4.6%3.8% 18 of 20 90%2.01
    133111Structural concrete block9.4%9.4%14.6%9.4%7.5%4.8%4.0% 18 of 20 90%2.36
    133121Decorative concrete block8.2%9.0%11.5%7.8%6.2%4.1%4.0% 19 of 20 95%2.08
    133131Concrete brick7.8%7.6%11.2%8.2%6.3%5.1%4.0% 18 of 20 90%1.95
    133141Concrete pavers6.0%5.9%14.4%9.3%6.5%4.6%3.6% 17 of 20 85%1.68
    1332Concrete pipe13.6%19.4%19.9%15.2%10.5%6.2%4.6% 16 of 20 80%2.97
    1333Ready-mix concrete6.7%9.5%13.2%8.5%6.3%5.2%4.6% 18 of 20 90%1.47
    1334Precast concrete products5.9%7.3%13.3%10.7%7.9%5.5%4.6% 19 of 20 95%1.29
    134Clay construction products ex. refractories3.9%7.1%9.0%6.3%4.2%2.8%2.1% 16 of 20 80%1.89
    1344Clay floor and wall tile, glazed and unglazed8.5%7.6%3.4%5.4%3.3%2.0%1.5% 16 of 20 80%5.84
    1345Structural clay products, n.e.c.5.7%8.9%8.4%6.6%4.2%4.3%3.7% 19 of 20 95%1.53
    1353Nonclay refractories4.1%5.0%17.4%7.6%6.2%4.0%3.8% 18 of 20 90%1.08
    138Glass containers7.8%9.6%12.8%9.0%6.3%3.8%3.4% 20 of 20 100%2.28
    139202Mineral wool for industrial, equipment, and appliance insulation5.4%8.1%11.4%8.7%6.1%3.0%3.0% 16 of 20 80%1.81
    13980212Molded packing and sealing devices2.7%4.2%11.9%6.2%4.1%2.6%2.3% 16 of 19 84%1.19
    1399Nonmetallic minerals and products, n.e.c.7.6%7.4%9.7%6.9%4.0%3.0%3.7% 18 of 20 90%2.05
    13990209Ground or treated minerals and earths4.9%4.5%9.7%5.9%3.7%2.8%4.1% 19 of 20 95%1.21
    13990211Dimension stone mining and quarrying23.7%23.7%8.2%10.5%6.8%3.9%3.4% 15 of 18 83%7.00
    141104Motorcycles, including three-wheel motorbikes, motorscooters, mopeds, and parts2.9%5.4%2.8%1.9%1.3%1.7%0.9% 11 of 15 73%3.45
    1412Motor vehicles parts1.2%1.1%3.7%3.4%2.1%1.2%1.2% 16 of 20 80%1.05
    1413Truck and bus bodies2.6%4.5%16.0%8.9%6.6%4.1%3.5% 19 of 20 95%1.27
    142Aircraft and aircraft equipment3.0%3.8%4.4%3.1%2.4%1.8%2.4% 19 of 20 95%1.28
    1421Aircraft3.1%4.0%5.2%3.3%2.6%1.9%2.6% 19 of 20 95%1.19
    142102Civilian aircraft4.3%5.7%6.4%4.5%3.7%2.6%3.0% 19 of 20 95%1.42
    1425Other aircraft parts and equipment3.9%4.5%2.7%2.7%2.2%1.6%1.7% 18 of 20 90%2.31
    1432Boats2.8%4.1%11.4%7.4%5.9%4.1%3.4%20 of 20100%1.2
    143202Inboard motorboats, including commercial and military (except sailboats and lifeboats)4.0%6.3%11.4%7.1%5.4%3.9%3.2%19 of 2095%1.3
    143203Inboard-outdrive boats, including commercial and military (except sailboats and lifeboats)3.3%3.3%7.7%5.2%4.8%3.5%2.7%18 of 2090%1.2
    143204All other boats (excluding military and commercial)7.5%7.5%5.1%7.4%5.0%3.3%2.5%15 of 1883%3.0
    149Transportation equipment, n.e.c.2.6%1.9%5.0%6.0%4.1%2.6%2.0%17 of 2085%1.3
    149111Other transportation equipment, incl. golf carts, vehicle trailers, and all-terrain vehicles2.6%1.9%5.0%6.0%4.1%2.6%2.0%17 of 2085%1.3
    15Miscellaneous products4.0%5.4%8.9%6.6%5.3%3.6%3.3%20 of 20100%1.2
    151Toys, sporting goods, small arms, etc.3.6%7.3%11.5%8.3%5.7%3.3%2.4%17 of 2085%1.5
    1511Toys, games, and children's vehicles1.1%2.3%4.5%3.8%2.7%1.8%1.9%18 of 2090%1.2
    1512Sporting and athletic goods5.9%12.3%18.6%13.1%8.8%4.7%2.7%15 of 2075%2.2
    152Tobacco products, incl. stemmed & redried8.1%10.2%11.2%9.9%8.5%6.9%5.6%19 of 2095%1.4
    1521Cigarettes, excluding electronic8.9%11.1%11.9%10.7%9.2%7.3%5.9%20 of 20100%1.5
    154Photographic equipment and supplies6.8%4.9%6.6%6.7%5.5%3.0%2.5%14 of 2070%2.7
    156Medical, surgical & personal aid devices1.9%2.9%4.3%2.4%2.0%1.4%1.3%20 of 20100%1.4
    156201Surgical and medical instruments1.2%2.3%3.7%1.4%1.2%0.9%0.6%14 of 2070%1.9
    1563Medical and surgical appliances and supplies2.0%2.7%4.6%3.2%2.4%1.4%1.3%18 of 2090%1.5
    157Other industrial safety equipment3.1%6.9%11.4%7.2%5.4%2.9%2.3%18 of 2090%1.3
    1571Personal safety equipment and clothing3.1%6.9%11.4%7.2%5.4%2.9%2.3%18 of 2090%1.3
    159404Costume jewelry and novelties7.1%7.1%5.7%5.6%5.1%3.4%2.6%19 of 2095%2.8
    1595Pens, pencils, and marking devices3.4%3.4%7.0%5.2%3.6%2.6%1.9%20 of 20100%1.8
    159AMiscellaneous products, n.e.c.2.9%3.7%16.0%10.6%8.0%4.5%3.1%17 of 2085%1.2
    159A04Signs and advertising displays3.5%6.6%16.4%9.1%5.9%3.7%2.5%18 of 2090%1.4
    SS45011*New cars1.3%1.7%6.2%6.7%4.3%2.0%1.4%12 of 2060%1.0
    SS45021*New trucks2.0%2.8%6.0%7.0%4.3%2.4%1.4%14 of 2070%1.4
    * Represents a Consumer Price Index (CPI) category; all other codes listed above are Producer Price Indexes

    Top 2023 Year End LIFO Candidates by Industry (NAICS or IRS PBA codes)

    NAICS/IRS PBA CodeNAICS PBA Industry Description9M Ended Sep. '23 (YTD)12M Ended Sep. '2312M Ended Dec. '223Y Annual Avg.5Y Annual Avg.10Y Annual Avg.20Y Annual Avg.20Y Annual Avg.Inflation Frequency '04 - '23YTD vs. 20Y Average Inflation Multiplier
    311110Animal food mfg.6.4%7.3%14.1%9.5%6.5%3.6%4.2%19 of 2095%1.5
    311111Dog and cat food manufacturing7.1%8.2%14.3%9.4%6.5%3.8%4.2%19 of 2095%1.7
    311200Grain & oilseed milling2.1%4.3%15.3%8.7%5.6%2.9%3.4%16 of 2080%1.3
    311230Breakfast cereal manufacturing6.5%9.3%13.0%10.4%6.6%2.6%3.3%15 of 2075%2.0
    311300Sugar & confectionery product mfg.6.6%6.8%8.8%6.4%4.2%2.2%3.0%16 of 2080%2.2
    311313Beet sugar manufacturing9.1%12.6%14.3%11.1%9.2%4.6%3.8%13 of 2065%2.4
    311314Cane sugar manufacturing7.7%13.3%8.8%8.2%6.5%3.2%3.3%14 of 2070%2.3
    311340Nonchocolate confectionery manufacturing4.6%6.5%11.6%6.7%5.1%3.0%2.8%19 of 2095%1.6
    311351Chocolate and confectionery mfg. from cacao2.7%4.0%8.7%2.7%2.5%1.8%2.8%19 of 2095%1.5
    311352Confectionery mfg. from purchased chocolate2.7%4.0%8.7%2.7%2.5%1.8%2.8%19 of 2095%1.5
    311400Fruit & vegetable preserving & speciality food mfg.9.1%12.9%18.2%11.1%6.9%4.2%4.0%17 of 2085%2.3
    311411Frozen fruit and vegetable manufacturing9.1%12.9%18.2%11.1%6.9%4.2%4.0%17 of 2085%2.3
    311412Frozen specialty food manufacturing2.6%4.3%16.7%7.5%4.3%2.2%2.2%14 of 2070%1.2
    311421Fruit and vegetable canning10.8%12.6%14.9%10.0%5.6%3.9%3.9%16 of 2080%2.8
    311423Dried and dehydrated food manufacturing7.6%11.8%12.0%8.3%5.3%3.7%3.5%17 of 2085%2.2
    311610Animal slaughtering & processing6.7%-0.6%-3.3%9.5%5.2%2.4%2.9%14 of 2070%2.3
    311611Animal, except poultry, slaughtering6.7%-0.6%-3.3%9.5%5.2%2.4%2.9%14 of 2070%2.3
    311612Meat processed from carcasses6.7%-0.6%-3.3%9.5%5.2%2.4%2.9%14 of 2070%2.3
    311613Rendering and meat byproduct processing6.7%-0.6%-3.3%9.5%5.2%2.4%2.9%14 of 2070%2.3
    311800Bakeries, tortilla & dry pasta mfg.2.1%4.3%15.3%8.7%5.6%2.9%3.4%16 of 2080%1.3
    311812Commercial bakeries3.1%5.2%14.2%6.9%4.6%2.9%3.1%19 of 2095%1.0
    311813Frozen cakes and other pastries manufacturing5.6%7.2%13.0%6.8%5.0%2.9%3.4%18 of 2090%1.7
    311821Cookie and cracker manufacturing2.8%2.8%7.5%3.9%2.8%1.4%1.8%16 of 2080%1.6
    311824Dry pasta, dough, and flour mixes manufacturing from purchased flour2.1%4.3%15.3%8.7%5.6%2.9%3.4%16 of 2080%1.3
    311919Other snack food manufacturing10.3%14.0%15.7%10.9%7.4%3.5%3.9%18 of 2090%2.7
    311920Coffee and tea manufacturing7.8%18.2%18.8%9.5%5.7%2.8%3.4%14 of 2070%2.3
    312000Beverage & tobacco product mfg.8.1%10.2%11.2%9.9%8.5%6.9%5.6%19 of 2095%1.4
    312111Soft drink manufacturing6.5%5.0%12.3%9.3%6.8%4.0%3.1%20 of 20100%2.1
    312112Bottled water manufacturing4.8%7.2%18.2%9.8%6.8%2.4%2.7%11 of 2055%1.8
    312113Ice manufacturing4.5%19.4%29.8%11.7%7.7%4.5%3.8%17 of 2085%1.2
    312130Wineries2.2%8.1%8.7%4.6%3.4%2.1%1.9%18 of 2090%1.2
    312230Tobacco manufacturing8.9%11.1%11.9%10.7%9.2%7.3%5.9%20 of 20100%1.5
    313320Fabric coating mills3.5%3.3%13.4%8.1%5.4%3.1%3.2%17 of 2085%1.1
    314910Textile bag and canvas mills3.8%5.1%6.4%7.5%5.2%3.0%2.6%18 of 2090%1.4
    314994Rope, twine, tire cord, and tire fabric mills7.0%5.7%2.8%10.5%6.1%3.0%8 of 1173%2.3
    314999All other miscellaneous textile product mills3.8%6.1%12.2%7.5%4.9%5 of 5100%1.3
    315000Apparel mfg.1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    315110Hosiery and sock mills1.7%1.7%4.6%2.6%1.7%1.4%1.2%16 of 2080%1.4
    315190Other apparel knitting mills1.7%1.7%4.6%2.6%1.7%1.4%1.2%16 of 2080%1.4
    315210Cut and sew apparel contractors1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    315220Men's and boys' cut and sew apparel manufacturing1.9%3.1%11.9%5.3%3.7%2.0%1.2%15 of 2075%1.6
    315280Other cut and sew apparel manufacturing1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    315990Accessories and other apparel manufacturing3.7%4.1%7.3%5.8%4.3%3.0%2.6%19 of 2095%1.4
    316110Leather & hide tanning & finishing2.0%2.7%3.2%7.1%0.2%-1.9%0.5%12 of 2060%4.1
    316990Other leather & allied product mfg.2.7%3.1%6.3%4.9%3.4%3.0%2.3%20 of 20100%1.2
    316998All other leather and allied good mfg.2.7%3.1%6.3%4.9%3.4%3.0%2.3%20 of 20100%1.2
    321219Reconstituted wood product manufacturing3.9%-0.3%3.0%4.0%2.5%1.9%14 of 1688%2.1
    321999Miscellaneous wood product manufacturing3.9%-0.3%3.0%4.0%2.5%1.9%14 of 1688%2.1
    322212Folding paperboard box manufacturing2.8%6.5%22.0%11.4%8.0%4.0%14 of 1974%1.7
    323100Printing & related support activities2.8%4.3%14.3%9.1%6.2%3.4%13 of 1493%1.3
    323113Commercial screen printing3.0%6.6%16.2%9.1%5.2%1.8%9 of 1560%1.7
    323117Books printing4.5%7.8%23.9%13.2%8.9%4.9%12 of 1675%1.6
    323120Support activities for printing2.8%4.3%14.3%9.1%6.2%3.4%13 of 1493%1.3
    324100Petroleum & coal products mfg.5.1%-11.9%12.1%20.2%6.0%1.6%4.1%13 of 2065%1.2
    324110Petroleum refineries18.8%-6.1%10.2%32.7%8.3%1.2%6.4%13 of 2065%2.9
    325413In-vitro diagnostic substance manufacturing4.8%5.1%0.5%5.1%4.3%2.8%3.0%19 of 2095%1.6
    325414Other biological product manufacturing4.8%5.1%0.5%5.1%4.3%2.8%3.0%19 of 2095%1.6
    325611Soap and other detergent manufacturing8.2%10.4%11.7%8.7%5.4%2.9%3.0%17 of 2085%2.7
    325620Toilet preparation manufacturing4.5%5.3%6.4%4.1%2.8%2.0%1.5%17 of 2085%2.9
    325992Photographic film and chemical manufacturing10.9%7.6%8.3%9.0%7.7%4.4%5 of 956%2.5
    326130Laminated plastics plate, sheet (except packaging), and shape manufacturing4.1%3.4%12.9%8.2%5.4%3.3%2.9%17 of 1989%1.4
    326211Tire manufacturing, except retreading2.3%4.3%15.2%8.4%5.4%2.3%3.5%15 of 2075%1.2
    326291Rubber product mfg. for mechanical use8.7%8.9%10.3%7.7%4.7%2.2%15 of 1979%3.9
    327100Clay product & refractory mfg.4.9%5.9%13.2%8.7%6.0%4.2%4.1%19 of 2095%1.2
    327120Clay building material and refractories mfg.4.9%5.9%13.2%8.7%6.0%4.2%4.1%19 of 2095%1.2
    327212Other pressed and blown glass and glassware4.2%4.0%4.9%4.7%3.5%3.0%1.7%16 of 2080%2.4
    327213Glass container manufacturing7.8%9.6%12.8%9.0%6.3%3.8%3.4%20 of 20100%2.3
    327215Glass product mfg. made of purchased glass4.2%4.0%4.9%4.7%3.5%3.0%1.7%16 of 2080%2.4
    327300Cement & concrete product mfg.8.6%8.9%12.2%8.3%6.4%5.1%4.6%19 of 2095%1.9
    327310Cement manufacturing9.0%10.7%13.0%8.7%5.9%5.4%4.1%18 of 2090%2.2
    327320Ready-mix concrete manufacturing4.3%4.6%10.7%6.3%4.3%3.0%3.1%19 of 2095%1.4
    327331Concrete block and brick manufacturing7.7%7.8%13.7%8.8%6.8%4.6%3.8%18 of 2090%2.0
    327332Concrete pipe manufacturing13.6%19.4%19.9%15.2%10.5%6.2%4.6%16 of 2080%3.0
    327390Other concrete product manufacturing6.8%9.0%14.9%9.8%7.1%5.3%4.5%18 of 2090%1.5
    327400Lime & gypsum product mfg.8.6%8.9%12.2%8.3%6.4%5.1%4.6%19 of 2095%1.9
    327900Other nonmetallic mineral product mfg.4.3%4.6%10.7%6.3%4.3%3.0%3.1%19 of 2095%1.4
    327910Abrasive product manufacturing2.1%5.9%9.6%8.0%5.6%3.6%3.3%20 of 20100%1.8
    327992Ground or treated minerals and earths mfg.4.9%4.5%9.7%5.9%3.7%2.8%4.1%19 of 2095%1.2
    327999All other miscellaneous nonmetallic mineral product manufacturing7.6%7.4%9.7%6.9%4.0%3.0%3.7%18 of 2090%2.0
    331491Nonferrous metal (except copper and aluminum) rolling, drawing, and extruding5.4%3.7%0.0%8.8%3.0%2.8%4.4%12 of 2060%1.2
    331513Steel foundries, except investment2.7%5.8%14.4%4.5%3.6%2.2%3.6%18 of 2090%1.6
    332112Nonferrous forging4.2%2.7%7.9%6.2%4.8%2.4%1.7%10 of 1953%2.5
    332117Powder metallurgy part mfg2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    332216Saw blade, handsaw, and hand and edge tool mfg2.7%4.5%7.7%5.2%4.3%2.5%2.6%19 of 2095%1.0
    332311Prefabricated metal buildings and components mfg7.1%2.9%-4.0%15.6%8.7%6.7%6.7%15 of 2075%1.1
    332410Power boiler and heat exchanger mfg8.9%9.7%12.7%12.2%7.9%4.8%4.9%19 of 2095%1.8
    332613Spring mfg8.6%8.5%27.0%19.5%11.8%6.9%5.3%15 of 2075%1.6
    332710Machine shops3.5%4.1%4.9%4.4%3.3%2.0%2.3%19 of 2095%1.5
    332721Precision turned product mfg2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    332722Bolt, nut, screw, rivet, and washer mfg4.3%6.6%15.1%11.9%9.6%5.1%4.4%18 of 2090%1.5
    332811Metal heat treating2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    332812Metal coating and nonprecious engraving2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    332813Electroplating, anodizing and coloring metal2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    332911Industrial valve mfg3.3%5.8%14.9%7.9%6.0%4.3%4.9%20 of 20100%1.2
    332912Fluid power valve and hose fitting mfg10.1%10.6%11.4%10.1%7.1%4.1%4.0%20 of 20100%2.5
    332996Fabricated pipe and pipe fitting mfg5.3%3.5%-0.4%11.0%6.4%3.6%7 of 1258%1.5
    332999Miscellaneous fabricated metal product mfg2.0%2.5%5.5%5.9%4.0%1.9%1.9%16 of 2080%1.0
    333000Machinery mfg.3.1%4.4%9.1%6.4%4.5%2.6%1.8%17 of 2085%1.7
    333120Construction machinery mfg5.8%6.1%8.7%8.2%6.4%3.6%3.4%20 of 20100%1.7
    333131Mining machinery and equipment mfg5.7%7.8%11.5%11.0%8.9%5.1%5.1%20 of 20100%1.1
    333132Oil and gas field machinery and equipment mfg1.9%7.4%9.6%4.9%3.1%1.7%3.0%15 of 2075%2.5
    333241Food product machinery mfg3.4%5.2%10.5%7.4%5.4%3.7%3.6%20 of 20100%1.4
    333243Sawmill, woodworking and paper machinery mfg6.8%7.4%10.6%9.0%6.3%5.5%18 of 1995%1.3
    333249Other industrial machinery mfg3.1%6.9%11.5%11.0%7.4%4.0%2.1%16 of 2080%1.4
    333314Optical instrument and lens mfg5.7%6.4%5.5%4.5%3.5%2.1%1.9%17 of 2085%3.0
    333316Photographic and photocopying equipment mfg6.8%4.9%6.6%6.7%5.5%3.0%2.5%14 of 2070%2.7
    333415Air-conditioning, refrigeration, and forced air heating equipment mfg4.0%4.3%19.3%12.6%8.7%5.2%3.9%19 of 2095%1.0
    333511Industrial mold mfg6.9%9.3%11.2%7.8%4.0%2.0%1.4%14 of 2070%5.0
    333514Special tool, die, jig, and fixture mfg2.5%3.0%5.5%4.8%3.5%2.0%10 of 1377%1.2
    333515Cutting tool and machine tool accessory mfg2.7%4.6%6.2%4.4%3.4%2.3%2.2%20 of 20100%1.2
    333517Machine tool mfg4.4%5.8%8.1%6.7%4.5%2.8%2.4%19 of 2095%1.8
    333519Rolling mill and other metalworking machinery mfg4.4%5.8%8.1%6.7%4.5%2.8%2.4%19 of 2095%1.8
    333611Turbine and turbine generator set units mfg5.5%6.0%2.2%3.9%3.9%1.7%2.5%14 of 1974%2.2
    333613Mechanical power transmission equipment mfg3.2%4.2%14.3%8.9%6.8%3.7%4.0%19 of 2095%1.1
    333618Other engine equipment mfg6.1%6.6%7.0%5.0%3.4%1.8%1.6%17 of 2085%3.9
    333912Air and gas compressor mfg3.8%5.4%21.2%11.2%8.1%5.1%17 of 1894%1.1
    333914Measuring, dispensing, and other pumping equipment mfg5.8%7.1%16.0%9.8%6.5%4.2%4.0%20 of 20100%1.5
    333921Elevator and moving stairway mfg5.3%5.9%5.0%8.9%6.5%4.2%2.9%17 of 2085%1.8
    333924Industrial truck, trailer, and stacker mfg2.8%5.9%10.2%8.7%5.9%4.1%4.0%20 of 20100%1.5
    333991Power-driven handtool mfg11.6%11.6%6.1%9.6%6.2%4.0%2.5%18 of 2090%4.6
    333993Packaging machinery mfg7.1%10.0%9.8%9.4%5.2%4.0%3.3%19 of 2095%2.2
    333994Industrial process furnace and oven mfg5.2%5.8%11.3%8.4%6.1%3.7%2.8%19 of 2095%1.8
    333996Fluid power pump and motor mfg4.0%4.9%7.9%5.7%4.1%2.5%2.9%20 of 20100%1.4
    333997Scale and balance mfg4.0%6.6%10.1%8.9%6.4%4.8%3.5%20 of 20100%1.1
    333999All other miscellaneous general purpose machinery mfg2.8%3.7%7.4%5.2%4.0%2.5%2.5%19 of 2095%1.1
    334412Bare printed circuit board mfg6.1%4.5%4.7%5.3%3.3%1.9%1.3%10 of 1759%4.8
    334417Electronic connector mfg4.1%7.1%15.5%7.8%5.8%3.3%11 of 1292%1.2
    334419Other electronic component mfg3.9%4.0%5.4%5.1%5.7%3.4%2.8%15 of 2075%1.4
    334512Automatic environmental control mfg5.5%6.5%4.8%6.0%4.1%2.7%2.1%18 of 2090%2.7
    334513Industrial process variable instruments3.0%5.9%13.7%6.5%4.5%3.0%2.8%20 of 20100%1.0
    334514Totalizing fluid meters and counting devices9.0%8.6%10.3%8.4%5.6%4.2%3.4%20 of 20100%2.6
    334515Electricity and signal testing instruments mfg3.6%4.4%4.4%2.6%1.8%0.8%1.1%14 of 2070%3.4
    334516Analytical laboratory instrument mfg3.4%7.4%7.7%5.4%4.3%3.3%2.7%20 of 20100%1.3
    334517Irradiation apparatus mfg0.8%2.6%8.1%2.1%1.1%0.5%0.5%11 of 1958%1.7
    334519Other measuring and controlling device mfg4.5%8.2%12.7%6.6%4.5%2.9%1.8%16 of 2080%2.5
    335000Electrical equipment, appliance & component mfg.1.3%2.1%7.1%4.4%3.1%1.7%0.8%12 of 2060%1.6
    335122Nonresidential electric lighting fixture mfg2.5%5.0%7.4%6.6%5.7%3.4%2.8%16 of 2080%1.8
    335129Other lighting equipment mfg3.8%3.8%7.6%5.2%4.0%2.5%2.1%19 of 2095%1.9
    335312Motor and generator mfg5.3%5.6%10.9%9.5%6.2%3.4%3.5%18 of 2090%1.5
    335313Switchgear and switchboard apparatus mfg3.3%6.7%20.4%11.2%7.5%4.1%3.6%18 of 2090%1.8
    335314Relay and industrial control mfg1.9%7.5%18.8%9.3%6.1%3.7%3.5%20 of 20100%2.1
    335929Other communication and energy wire mfg4.5%6.5%7.7%11.6%7.9%3.9%9 of 1275%1.1
    335931Current-carrying wiring device mfg24.2%25.5%6.9%13.7%8.4%4.2%3.7%18 of 2090%6.5
    336120Heavy duty truck mfg1.7%2.1%1.9%1.7%1.5%1.7%17 of 17100%1.0
    336211Motor vehicle body mfg2.6%4.5%16.0%8.9%6.6%4.1%3.5%19 of 2095%1.3
    336340Motor vehicle brake system mfg3.7%1.9%9.7%8.8%5.5%2.9%1.2%14 of 2070%3.2
    336350Motor vehicle transmission and power train parts manufacturing1.3%1.0%4.3%2.7%1.9%1.0%1.2%15 of 2075%1.1
    336390Other motor vehicle parts mfg1.2%1.1%3.7%3.4%2.1%1.2%15 of 1979%1.1
    336411Aircraft mfg3.1%4.0%5.2%3.3%2.6%1.9%2.6%19 of 2095%1.2
    336413Other aircraft parts and equipment mfg3.9%4.5%2.7%2.7%2.2%1.6%1.7%18 of 2090%2.3
    336612Boat building2.8%4.1%11.4%7.4%5.9%4.1%3.4%20 of 20100%1.2
    336991Motorcycle, bicycle, and parts mfg2.9%5.4%2.8%1.9%1.3%1.7%0.9%11 of 1573%3.4
    336999All other transportation equipment mfg2.6%1.9%5.0%6.0%4.1%2.6%2.0%17 of 2085%1.3
    337122Nonupholstered wood household furniture mfg7.0%6.5%7.2%8.6%5.7%3.6%3.0%20 of 20100%2.3
    337127Institutional furniture mfg2.5%7.1%12.6%9.0%6.8%4.3%13 of 13100%1.6
    337211Wood office furniture mfg2.9%4.0%11.8%8.4%5.7%3.6%2.7%20 of 20100%1.1
    337212Custom architectural woodwork and millwork4.9%6.2%10.7%8.9%5.9%3.7%10 of 1191%1.3
    339110Medical equipment & supplies mfg.4.0%5.4%8.9%6.6%5.3%3.6%3.3%20 of 20100%1.2
    339112Surgical and medical instrument mfg1.2%2.3%3.7%1.4%1.2%0.9%0.6%14 of 2070%1.9
    339113Surgical appliance and supplies mfg2.0%2.7%4.6%3.2%2.4%1.4%1.3%18 of 2090%1.5
    339115Ophthalmic goods mfg5.7%6.4%5.5%4.5%3.5%2.1%1.9%17 of 2085%3.0
    339910Jewelry and silverware mfg2.0%5.2%9.2%4.1%4.7%2.1%3.5%15 of 2075%1.5
    339920Sporting and athletic goods mfg5.9%12.3%18.6%13.1%8.8%4.7%2.7%15 of 2075%2.2
    339940Office supplies, except paper, mfg2.5%2.8%11.7%6.8%4.5%3.4%2.0%17 of 1989%1.2
    339950Sign mfg3.5%6.6%16.4%9.1%5.9%3.7%2.5%18 of 2090%1.4
    339991Gasket, packing, and sealing device mfg2.5%5.1%9.1%6.3%4.1%2.6%2.6%19 of 2095%1.9
    339995Burial casket mfg3.0%8.4%6.7%7.1%5.6%4.4%4.7%19 of 2095%1.8
    423400Professional & commercial equipment & supplies3.1%4.4%9.1%6.4%4.5%2.6%1.8%17 of 2085%1.7
    423800Machinery and supply merchant wholesalers3.1%4.4%9.1%6.4%4.5%2.6%1.8%17 of 2085%1.7
    423900Miscellaneous durable goods, except recyclable material, merchant wholesalers4.0%5.4%8.9%6.6%5.3%3.6%3.3%20 of 20100%1.2
    423910Sporting & recreational goods & supplies3.6%7.3%11.5%8.3%5.7%3.3%2.4%17 of 2085%1.5
    423920Toy & hobby goods & supplies3.6%7.3%11.5%8.3%5.7%3.3%2.4%17 of 2085%1.5
    423940Jewelry, watch, precious stone & precious metals2.0%5.2%9.2%4.1%4.7%2.1%3.5%15 of 2075%1.5
    424300Apparel and piece goods merchant wholesalers1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    424700Petroleum and petroleum products merchant wholesalers18.8%-6.1%10.2%32.7%8.3%1.2%6.4%13 of 2065%2.9
    424920Books, periodicals & newspapers2.8%4.3%14.3%9.1%6.2%3.4%13 of 1493%1.3
    424940Tobacco & tobacco products8.1%10.2%11.2%9.9%8.5%6.9%5.6%19 of 2095%1.4
    424990Other miscellaneous nondurable goods18.1%12.8%22.7%8.1%6.1%5.3%9 of 1090%3.4
    441222Boat dealers2.8%4.1%11.4%7.4%5.9%4.1%3.4%20 of 20100%1.2
    441300Automotive parts, accessories & tire stores1.2%1.1%3.7%3.4%2.1%1.2%1.2%16 of 2080%1.0
    441310Automotive parts and accessories stores1.2%1.1%3.7%3.4%2.1%1.2%1.2%16 of 2080%1.0
    441320Tire dealers2.2%4.4%15.3%8.3%5.4%2.3%3.5%15 of 2075%1.3
    444100Building materials and supplies dealers5.8%2.6%0.1%9.3%6.5%4.1%10 of 10100%1.4
    444190Other building materials dealers18.5%9.7%-11.7%8.9%9.3%7.3%3.7%11 of 2055%5.0
    444220Nursery, garden, and farm supply stores5.4%5.0%9.6%10.3%8.1%4.2%9 of 1090%1.3
    445210Meat markets6.7%-0.6%-3.3%9.5%5.2%2.4%2.9%14 of 2070%2.3
    446120Cosmetics, beauty supplies & perfume stores4.5%5.3%6.4%4.1%2.8%2.0%1.5%17 of 2085%2.9
    446130Optical goods stores5.7%6.4%5.5%4.5%3.5%2.1%1.9%17 of 2085%3.0
    447100Gasoline stations (including convenience stores with gas)37.1%7.1%-5.5%32.3%6.1%0.0%5.1%12 of 2060%7.2
    448100Clothing stores2.2%3.2%5.2%4.9%3.1%2.2%1.8%18 of 2090%1.2
    448110Men's clothing stores1.9%3.1%11.9%5.3%3.7%2.0%1.2%15 of 2075%1.6
    448140Family clothing stores1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    448150Clothing accessories stores2.2%3.9%15.3%7.2%5.7%3.4%11 of 1292%1.1
    448190Other clothing stores1.2%1.5%4.9%3.2%1.8%1.3%1.2%16 of 2080%1.0
    448310Jewelry stores2.0%5.2%9.2%4.1%4.7%2.1%3.5%15 of 2075%1.5
    448320Luggage & leather goods stores6.8%6.9%2.5%3.4%2.4%2.1%1.9%18 of 2090%3.5
    451110Sporting goods stores5.9%12.3%18.6%13.1%8.8%4.7%2.7%15 of 2075%2.2
    451211Book stores2.8%4.3%14.3%9.1%6.2%3.4%13 of 1493%1.3
    451212News dealers & newsstands2.8%4.3%14.3%9.1%6.2%3.4%13 of 1493%1.3
    453200Office supplies, stationery, and gift stores2.5%2.8%11.7%6.8%4.5%3.4%2.0%17 of 1989%1.2
    453210Office supplies & stationery stores3.4%3.4%7.0%5.2%3.6%2.6%1.9%20 of 20100%1.8
    453910Pet & pet supplies stores6.4%7.3%14.1%9.5%6.5%3.6%4.2%19 of 2095%1.5
    454310Fuel dealers37.1%7.1%-5.5%32.3%6.1%0.0%5.1%12 of 2060%7.2

2023 Top LIFO Opportunities & Strategies Guide

  • Table of Contents
    2023 Top LIFO Opportunities & Strategies Guide
    Section Slide(s)
    About Us 3
    How LIFO Works 4
    Why Use LIFO? 5 – 6
    Common Misconceptions 7 – 8
    Dollar-value LIFO 9 – 11
    Top 2023 LIFO Election Opportunities 12 – 16
    Top 2023 LIFO Planning Strategies 17 – 20
    Why Perform Analysis or Review? 21
    Complimentary Offerings 22
    Why Use LIFO Software or Outsource LIFO? 23
    Turnkey Outsourcing Solutions 24 – 27
    Key Takeaways 28
    Actionable Items 29
    Resources 30
  • How LIFO Works

  • Why Use LIFO?
    • Tax Benefits
      • LIFO often creates material long-term tax deferral/savings: Not just a one-time tax benefit or timing difference between book & tax such as straight-line vs. accelerated depreciation
      • During periods of rising costs, LIFO:
        • Provides more after-tax free cash flow than non-LIFO methods when there’s inflation
        • Ensures taxes aren’t paid on goods that have been purchased, but have yet to be sold
        • Improves ability to replenish & maintain an adequate level of inventory
        • Some consider LIFO to act as a tax deferral tool that can be thought of as an interest-free loan
        • Others believe that LIFO essentially acts as a permanent form of tax savings if a company is profitable, satisfies the going concern assumption & intends to stay on LIFO in perpetuity
      • Tax Court opinion regarding LIFO (see Amity Leather vs. Commissioner): The theory behind LIFO is that income may be more accurately determined by matching current costs against current revenues, thereby eliminating from earnings any artificial profits resulting from inflationary increases in inventory costs. At the heart of the LIFO method is the principle that income is more clearly reflected by matching current costs with current revenues.
    • Preferable accounting method
      • LIFO is an accounting method permissible under GAAP, not just a tax incentive
      • During periods of rising costs, income is most clearly reflected by matching current costs with current revenues
      • Provides a more conservative measure of income compared to non-LIFO methods during periods of rising costs.
    • Acts as a mechanism that’s similar in nature to nominal to real GDP adjustment
      • When there’s inflation, portion of ending inventory balance is transferred to cost of goods sold to normalize reported income & tax liability
      • Isn’t a tax loophole that always provides a benefit since deflation causes LIFO recapture or additional income to be recognized
  • LIFO Cost-Benefit Case Study

    LIFO Cost/Benefit Case Study: Building Products Manufacturer

  • Common Misconceptions
    • Misconception #1: The following burdens & costs outweigh the benefits of LIFO:
      • Management, cost accounting & purchasing/sales functions & responsibilities will be complicated by using LIFO
      • Wholesale changes must be made to accounting system since item costs & the physical flow of goods must be tracked on a LIFO basis
      • Clarifications
        • Under the dollar-value method, the LIFO value of inventory is determined outside of the accounting system & a top-side accounting entry is recorded to adjust ending inventory from cost to LIFO & accrue the change in the LIFO reserve
        • Under dollar-value LIFO, item costs remain being tracked the same way they did prior to electing LIFO & requires no changes to the accounting system other than adding a contra-inventory subledger account called the LIFO reserve
    • Misconception #2
      • Employee compensation & bonuses will be complicated from using LIFO
      • Clarification: Internal management reports can be presented on a non-LIFO basis as long as they’re only being used internally
    • Misconception #3: Tax savings from LIFO will be minimal because of:
      • High inventory turnover or new item rates
      • Just in time inventory or lean accounting practices
      • Clarifications
        • Under the dollar-value method, the inflation rate used to calculate the LIFO reserve change is based on a 12 month comparison of current vs. prior year’s item/unit costs extended by quantities on hand in ending inventory regardless of the turnover ratio
        • External indexes reconstruct inflation on new items, which ensures the same amount of inflation is applied to new & preexisting items
        • Manufacturers will always have raw materials & WIP; wholesalers/distributors & retailers still must maintain adequate base stock
    • Misconception #4: Internal costs must be used to measure LIFO inflation
      • Clarification: External indexes such as the BLS CPI/PPI can be used to measure inflation, thereby minimizing reliance on accounting information systems
    • Misconception #5: LIFO reserve change misconceptions:
      • This year’s LIFO reserve can’t grow unless this year’s ending inventory balance is as much or higher than last year’s ending inventory balance
      • This year’s LIFO reserve will decrease if this vs. last year’s inventory balance decreases
      • Material LIFO recapture will occur if there’s a significant decrease in inventory
      • Clarifications
        • In most cases, material LIFO recapture only occurs when there is either substantial deflation and/or substantial inventory liquidations
        • When there’s inflation, LIFO reserve can increase even when current vs. prior year inventory balances decrease
        • Any LIFO recapture (LIFO income) caused by inventory decreases can be partially or fully offset by the LIFO expense created from inflation
  • Dollar-value LIFO


    • Accounting system continues tracking inventory costs the same way before and after LIFO is adopted, meaning LIFO is never applied at the item level (unit costs are never converted to LIFO)
    • LIFO reserve contra inventory account added to subledger to enable a top-level adjustment to be annually recorded to account for the difference between inventory at cost in accounting system (FIFO, average cost etc.) & inventory at LIFO
    • LIFO side calculation made outside of accounting system to determine the LIFO inventory balance and CY vs. PY LIFO reserve change & journal entry recorded to adjust cost of goods sold & CY vs. PY LIFO reserve change

    Accounting for LIFO Using the Dollar-value Method

  • Good LIFO Candidate Overview
    • Companies with high inflation frequency and/or high historical average inflation rates are often ideal LIFO candidates
    • Companies with a combination of high inflation frequency and historical average inflation rates are the best LIFO candidates
    • High Inflation frequency: Common profiles include wholesalers & retailers. Includes some of the most predominant users of LIFO, such as auto dealers & supermarkets.
      • Pros
        • LIFO reserve essentially grows in perpetuity & acts as a tax savings annuity since there’s rarely (if ever) deflation for industries with highest inflation frequency
        • Often shielded from volatility of raw materials commodities, meaning LIFO recapture rarely if ever happens, and when it does, it’s usually immaterial
        • Industries with the highest inflation frequency tend to stay on LIFO the longest
        • Attractive for nearly all risk appetite profiles since there’s minimal downside
      • Cons
        • Tend to have lower historical inflation rates & long-term tax benefits from LIFO compared to industries with lower inflation frequency
        • May be less appealing to companies requiring material short-term benefits if the historical average inflation rate is on the lower end of the spectrum
    • High historical average inflation rates & tax benefits: Common profiles include manufacturers and industries with volatile raw materials such as chemicals, lumber & steel wholesalers (metal sheet/strip/coil, bars/shapes/pipes etc.)
      • Pros
        • Tax benefits of LIFO are highly likely to far outweigh administrative burdens/ costs for industries with the highest historical average inflation rates
        • Largest long-term tax benefits from LIFO are typically found in these industries
        • Massive LIFO reserves can be built in a short amount of time
        • Attractive to companies with high risk appetite
      • Cons
        • Tend to have lower historical inflation frequency, which results in a higher probability of taxable income being created from LIFO
        • Not ideal for companies with low risk appetite if there is low inflation frequency since material LIFO reserve recapture is a real possibility every so often
        • Industries with the highest historical average inflation rates and low inflation frequency tend to go off LIFO more frequently
    • Company-specific metrics such as historical inflation frequency and average annual inflation rates should be included in the LIFO due diligence process to ensure each company’s risk/reward profile matches or aligns with the potential short/long term benefits and costs of LIFO
  • LIFOPro's Good LIFO Candidate Profile
    • Good LIFO Candidate: LIFOPro has developed a proprietary scoring system to identify good candidates, which requires for the following criteria to be met –
      • High inflation frequency: Must have inflation in more than half of the last 20 years (11 or more). Best LIFO candidates have high inflation frequency because the more often inflation is expected to occur, the higher the likelihood that LIFO acts as annuity & the lower the likelihood of deflation/LIFO recapture
      • Historical average annual inflation rate of 1% or greater: Ensures an adequate amount of long-term inflation exists for the benefits of LIFO to far outweigh the cost. Most predominant users of LIFO such as auto dealers & supermarkets have a 1% – 2% long-term average inflation rate.
      • At least $2M – $5M of inventory: Appropriate range dependent on historical inflation rate, tax rate & company’s perceived value of LIFO tax benefits
    • Good 2023 LIFO Election Candidate: Must meet the good LIFO candidate criteria listed above & have an election year inflation rate that’s greater than or equal to the historical average annual inflation rate
    • Top 2023 LIFO Election Candidates
    • Election Year LIFO Tax Savings Formula & Example
      • Formulas
        • Election year taxable income reduction from LIFO (LIFO expense): Prior year inventory balance at cost * Current year inflation rate
        • Election year LIFO tax benefit: Current year LIFO expense * Combined federal & state tax rate
      • Example:
        • Assumptions: $5M prior year end inventory balance, 10% current year inflation & 40% tax rate
        • Results:
          • Election year LIFO expense: $5M * 10% = $500K
          • Election year LIFO tax benefit: $500K * 40% = $200K
  • LIFO Election Timing
    • The timing of the LIFO election is key, making it important to understand the best & worst time to elect LIFO
    • The tax benefits from LIFO are primarily driven by the amount of inflation measured in any given year
    • One of the best possible times to elect LIFO is in a year where the inflation will be at least at or above the historical average because:
      • Ensures the benefits of LIFO outweigh the administrative burden and related costs in the year of election
      • In cases where the election year inflation is higher than the historical average:
        • Tax benefit from LIFO will represent multiple years worth of inflation in the election year alone when compared to a normal period of inflation
        • Can reduce or largely minimize the chance of material or complete LIFO reserve recapture occurring in the future (see below)

    10-year LIFO Reserve Comparison: Differential Between Electing in an Average vs. High Inflation Period

  • Top 2023 LIFO Election Opportunities

    LIFOPro's 2023 Top LIFO Election Locks Blog
    LIFOPro’s 2023 Good LIFO Election Candidates & Client ID Tool

    2023 Top LIFO Candidates by Bureau of Labor Statistics Price Groupings

    • Processed foods & feeds, including:
      • Meats, poultry & fish
      • Processed fruits & veggies
      • Sugar & confectionary
      • Beverages & beverage materials
    • Petroleum products, including Crude/refined petroleum products & Gasoline
    • Chemical products, including:
      • Soaps, detergents, polishing & other sanitation goods
      • Cosmetics & other toilet preparations
    • Machinery & equipment
      • Construction machinery & equipment
      • Power-driven handtools, including parts and attachments
      • General purpose machinery & equipment, including:
        • Heating, ventilation & air-conditioning (HVAC) machinery & equipment
        • Pumps, compressors & equipment
        • Industrial material equipment & handling equipment
        • Fluid power equipment (hydraulics)
        • Metal valves
        • Electrical machinery & equipment
    • Nonmetallic mineral products, including Glass, Concrete & Clay goods
    • Transportation equipment, including New cars/trucks, Aircraft, Boats, Vehicle trailers, ATVs/UTVs
    • Toys, sporting goods & small arms
    • Medical, surgical & personal aid devices
  • LIFO Conformity & Financial Reporting Disclosure Requirements
    • LIFO Conformity
      • Face of the annual or year end income statement must present income, profit or loss using the LIFO method beginning no later than the year that LIFO is adopted for tax purposes
      • Once LIFO has been elected for tax purposes, income, profit or loss must be computed using LIFO on the face of all subsequent annual financial statements (unless LIFO is terminated for tax purposes)
    • Non-LIFO Disclosures
      • The following non-LIFO disclosures and information are allowed to be made within the financial reports while maintaining LIFO conformity compliance (see IRS Regs. §1.472-2(e)):
        • Reporting cost of goods sold or operating profit on a non-LIFO basis and reporting LIFO as a nonoperating item in the primary income statement – Companies are allowed to present cost of goods sold and operating profit on a non-LIFO basis without violating the LIFO conformity rule as long as there’s an adjustment so that ending net income is calculated on a LIFO basis. This can be accomplished by including the LIFO adjustment as a nonoperating item on the income statement (supplemental schedule of nonoperating items could be included if there are multiple nonoperating items)
        • Supplemental and explanatory information using a non-LIFO method – Includes anything other than the primary presentation of the income statement, which includes the following:
          • Notes to the income statement
          • Appendices & supplements to the income statement
          • Other reports included in the financial reports, such as:
            • Management’s discussion and analysis
            • Statement of changes in financial position
            • Letters to shareholders, partners or other stakeholders
            • Summary of key figures
        • Inventory asset value disclosures using a non-LIFO method, including balance sheet disclosures
    • Internal Management & Interim Reports
      • Internal Management Reports – The use of a non-LIFO method is allowed on all portions of internal management reports as long as the reports will not be issued or released to parties outside of the organization. Examples include earnings projections, budgets, sales and sales forecasts.
      • Interim reports – If issued in accordance with GAAP, same LIFO disclosure rules described above apply. If not issued in accordance with GAAP, then interim reports are not required to be presented on a LIFO basis (exception is a series of interim reports that can be used to ascertain income, profit & loss by combining those reports)
  • Top 2023 LIFO Planning Strategies: IPIC Method
    • Switch to IPIC method (using Bureau of Labor Statistics Consumer/Producer Price Index)
      • Tax deferral maximization: Often creates more inflation than actual internal product costs or internal index inflation for the following reasons:
        • BLS PPI inflation will be greater than internal index inflation on goods that were imported or purchased for resale products sourced from abroad because BLS PPI only measures U.S. or domestic production & domestically produced goods inflation rates have historically been materially higher than imported goods
        • When the IPIC method is used, new items are given preexisting item inflation since BLS only measures price changes on preexisting items (or they reconstruct the cost on any newly-introduced item). With internal indexes, new items’ prior year costs are often set to equal to its current year cost since reconstruction is often burdensome/subjective & IRS Regs. prohibit new items from being excluded from the inflation calculation. As a result, during periods of inflation, new items will reduce the overall current year inflation rate when internal indexes are used. This becomes more pronounced when there’s high item turnover and/or high inflation.
        • Much quicker, simpler means of performing interim estimates than internal indexes
      • Minimize IRS scrutiny upon audit or reduce audit risk
        • IPIC method is IRS safe harbor method, which affords taxpayers less scrutiny from IRS upon audit compared to taxpayers using internal indexes since inflation calculation relies on external government indexes & internal indexes rely on the taxpayer’s accounting records/systems
        • Switch to IPIC method from internal indexes to IPIC method provides audit protection from prior period calculation errors
        • Can also provide a safe harbor for companies with LIFO books & records audit risk. See IRS LIFO Records Practice Unit
      • Simplify LIFO calculation & reduce volatility
        • IPIC method can simplify inflation calculation for manufacturers because:
          • Reduces reliance on accounting information systems & appropriate allocation of item cost components such as materials, labor & overhead since inflation is measured using BLS PPI, not current & prior/base period item/unit costs
          • Inflation for WIP inventories are calculated by assigning the applicable finished goods PPI code to the WIP items
          • IPIC method can reduce volatility because BLS surveys thousands of producers & eliminates extreme cost fluctuations that could occur within any single company
      • Automatic approval to change to IPIC method & is applied on a cutoff basis
        • Affords audit protection from LIFO reserve overstatements since change is applied beginning in year of change & built from pre-change LIFO reserve
        • Only means of automatically changing from double-extension to link-chain (double-extension = current vs. base year cost comparison; link-chain = current vs. prior year cost comparison; advanced approval change to switch from double-extension to link-chain internal index)
      • Learn more about the IPIC method here: IPIC LIFO Advantages
  • Top 2023 LIFO Planning Strategies: Auto Dealers
    • Auto dealers can use alternative LIFO method (ALM) using actual invoice costs or IPIC method using Bureau of Labor Statistics Consumer/Producer Price Indexes (BLS CPI/PPI)
    • Prior to 2020, majority of auto dealers used ALM because it created more tax benefits than IPIC method
    • IPIC method has grown exponentially in popularity beginning in 2020 primarily because of materially higher tax benefits
    • Secondary benefit of IPIC method is minimal administrative costs, simplest means for performing interim estimates & more flexibility in terms of meeting LIFO conformity financial reporting requirements when compared to ALM
    • Alternative LIFO method (ALM)
      • Measures inflation based on comparing current & prior period’s invoice costs
      • Item definition is specific to each vehicle/VIN, meaning inflation must be calculated for each vehicle
      • Inflation calculation is materially more burdensome since invoice costs must be compared on a vehicle-by-vehicle basis
      • Most predominantly utilized for new vehicles
      • Highest administrative burden & outsourcing costs since inflation calculation requires invoice cost comparisons
    • IPIC method
      • Lowest administrative burden & outsourcing costs since inflation calculation only requires summarized totals
      • Measures inflation by using Bureau of Labor Statistics Consumer/Producer Price Indexes (BLS CPI/PPI)
      • Precludes the need to calculate inflation for each vehicle since government indexes are used to calculate inflation
      • Many dealers include used vehicles & parts in election scope because inflation calculation is much simpler than ALM
      • Only documentation required to complete LIFO calculation is a breakdown of inventory balances by the following types:
        • New cars
        • New trucks, SUVs & minivans
        • Used vehicles (for CPI; used vehicles must be broken down between cars/trucks if PPI is used)
        • Parts
  • Top 2023 LIFO Planning Strategies: LIFO Method Alternatives & Best Practices
    • LIFO value pricing method
      • Specific goods (“unit LIFO”): LIFO value of inventory is accounted for at the item level. Unit costs & the physical flow of goods are tracked on a LIFO basis within accounting system
      • Dollar-value: Under this method, the LIFO value is accounted for as a top-side adjustment rather than at the item level. Unit costs & the physical flow of goods are tracked at actual cost (FIFO, average cost or specific ID) or standard cost. Side computation made outside of accounting system to calculate inflation, layers (decrements), inventory @ LIFO, LIFO reserve & LIFO expense (income)
      • Best practice: Use dollar-value LIFO because it avoids many undesirable characteristics of LIFO & offers materially higher long-term tax benefits when compared to unit LIFO
    • LIFO index computation timeframe selection
      • Link-chain: Current quantities are extended against current & prior period item/unit costs to calculate current year inflation index (one year measurement period)
      • Double-extension: Current quantities are extended against current & base period unit costs to calculate current year cumulative index (all years on LIFO measurement period)
      • Best practice: Use Link-chain LIFO because it’s absent of the inherent flaws built into double-extension method & link-chain precludes the need to reconstruct base year costs for new items
    • Inflation measurement source
      • Internal indexes: Current year inflation index measured using actual costs paid/incurred to acquire/procure the goods
      • External indexes: aka Inventory Price Index Computation or IPIC method. Bureau of Labor Statistics Consumer/Producer Price Indexes assigned to goods to calculate current year inflation index
      • Best practice: Common to use the method that’ll provide the most favorable tax position (inflation), but ultimately varies by industry, product mix & many other company-specific considerations
    • Current-year cost & layer valuation method
      • Latest acquisitions (FIFO)
      • 12-month moving average or rolling-average cost (aka weighted average cost)
      • Earliest acquisitions
      • Specific identification
      • Any other method that’s clearly reflective of income
      • Best practice: For first-time elections, use the same method employed by accounting system to track item costs prior to electing LIFO to prevent wholesale changes to accounting system or IT burden associated with measuring multiple methods
    • Pooling method
      • Resellers (retailers & wholesalers/distributors)
        • By line or class of goods
        • Natural business unit can be used in certain cases
      • Manufacturers/producers
        • Natural business units (separate pool required for manufactured vs. purchased for resale goods)
        • Raw materials content
        • Multiple pools
      • IPIC LIFO method users
        • IPIC Pooling method: pools established for each BLS major group assigned 5% or more of the total inventory balance at cost
        • Any non-IPIC pooling method listed above that matches your industry type ( i.e., manufacturers using IPIC method could use natural business unit pooling method)
        • Best practice: Utilize the method expected to create/require the least amount of LIFO pools to minimize likelihood of LIFO recapture caused by inventory liquidations
    • Learn more here: LIFO Methods, Rules & Regulations
  • Top 2023 LIFO Planning Strategies: Interim Estimate Options
    • Companies perform interim LIFO estimates for a wide array of reasons, including:
      • Financial reporting compliance – Under Generally Accepted Accounting Principles, an estimate for the interim cost of sales is required for interim reporting purposes. Because of this, companies issuing GAAP financial statements include an estimated LIFO adjustment in their interim reports. Also, some companies are required by their lenders or suppliers to issue interim financial reports, and as a result, companies may also be required to include an estimated LIFO adjustment in their interim estimates.
      • Tax compliance – Although IRS Regs. don’t require for interim estimates to be performed (tax law defines LIFO as an annual calculation), many companies perform interim estimates to incorporate the LIFO effect into their quarterly estimated tax payments
      • Forecasting and planning – Many companies perform at least one interim LIFO estimate in order to properly forecast and plan the estimated LIFO effect on their bottom line. An added benefit of doing so is to smooth out the effect of the estimated LIFO reserve change over the course of the year as opposed to booking a single LIFO adjustment at year end. An added benefit of forecasting & planning is that one can avoid material or unexpected surprises from LIFO at year end. These types of estimates come in many shapes and forms in terms of frequency, including mid-year estimates, ones made towards the end of the year, and some even perform estimates on a monthly basis (monthly estimates are the least common interim estimate frequency)
      • Maximize the LIFO reserve increase (or minimize the decrease) – When there’s inflation, a minimum “Current-year cost” balance is required to avoid what is known as layer erosion effect LIFO income (Current-year cost can be thought of as inventory at cost i.e. FIFO or average cost). If the Current-year cost balance is below the minimum required amount, layer erosion effect LIFO income can erode or completely wipe out the LIFO expense created by inflation for that period (or in some cases, a net LIFO reserve decrease can occur from substantial layer erosion income). Because of this, some companies will plan their year end purchases to achieve the most desirable LIFO results to minimize the effects of layer-erosion LIFO income.
    • Companies that don’t issue interim financial reports are not required to perform interim LIFO estimates
    • Companies that issue non-GAAP interim reports are also not required to perform interim LIFO estimates
    • LIFOPro offers solutions to make quickly obtain accurate interim LIFO estimates
    • Up to 3 interim estimates are included in LIFOPro’s outsourcing engagements for companies using the IPIC method
    • See LIFOPro’s Blog: Exploring Interim LIFO Estimate Alternatives
  • Why Perform Analysis or Review?
    • Election Benefit Analysis (for companies not on LIFO, but considering adoption)
      • Thorough LIFO Due diligence should be considered essential
      • Failing to perform thorough LIFO due diligence can lead to the following:
        • Materially lower tax benefits being obtained in the long-term as a result of selecting suboptimal methods
        • Impermissible methods unknowingly being used & audit risk being created
        • Utilizing methods that are more error-prone or burdensome than simpler, less time-intensive alternatives
        • Higher likelihood of eventually terminating LIFO election due to lack of benefits and/or excessive administrative costs/resources
      • Outsourcing due diligence work to a LIFO subject matter expert ensures the following:
        • Historical inflation studied to predict long-term impact of LIFO to illustrate potential future benefits & risks
        • All method alternatives are considered & best practices are considered/employed
        • Best possible tax answer is achieved while ensuring compliance
        • Responsibilities & requirements incident to electing are clearly defined
    • Review (for companies already on LIFO)
      • The majority of calculations & methods we review either contain errors, have compliance issues or utilize suboptimal methods
      • Most compliance issues & suboptimal methods usage results from a lack of thorough due diligence being performed at the time of election
      • Very few firms have software to quickly automate LIFO calculations, confirm calculation accuracy & easily identify errors
      • No CPA firm other than LIFOPro works exclusively with LIFO 100% of the time, meaning that they’re unable to provide thorough due diligence
      • Obtaining a review from a LIFO subject matter expert ensures the following:
        • Calculation errors undetected for many years are identified & prevented from occurring in the future
        • Compliance issues & suboptimal methods usage are identified and best practices feedback & recommendations are provided
        • Strategies for reducing or eliminating IRS audit risk are provided
  • Complimentary Offerings
    • Companies not on LIFO: LIFO Election Benefit Analysis
      • Comprehensive LIFO election case study packaged in the form of a PDF report containing the following:
        • Election year estimated tax LIFO benefits, including comparisons between internal vs. external inflation measurement source
        • 20 year pro forma IPIC LIFO calculation using Bureau of Labor Statistics Consumer/Producer Price Indexes to determine inflation frequency, long-term historical average annual inflation rate & whether a company is a good LIFO candidate
        • Election recommendations including which submethods should be used
        • How LIFO Works appendix covering all the essentials
        • LIFOPro also provides turnkey outsourcing solution fee quote showing election year & recurring costs
        • Sample LIFO Election Benefit Analysis Report
    • Companies on LIFO: Calculation, Methods & Best Practices Review
      • Comprehensive calculation review & guide packaged in the form of a PDF report containing the following:
        • Calculation review
        • Methods review
        • Best practices feedback, including:
          • Optimization strategies & tax deferral maximization opportunities
          • Errors & IRS audit risk areas identified
          • Strategies for reducing IRS audit risk and/or obtaining audit protection
        • Recommendations & implementation steps provided for applying recommended changes
        • Same LIFOPro report package provided to outsourcing clients & fee quote also provided in addition to review report
        • Companies can also receive complimentary LIFOPro software trial
        • Sample LIFO Calculation, Methods & Best Practices Review Report
  • Why Outsource LIFO or License Software?
    • In-house calculations made WITHOUT software
      • Inflation calculation can be very complex when performed in spreadsheets
      • Important steps may be overlooked or left out altogether when manually performed in-house, such as:
        • Using too few BLS categories increases IRS audit risk & using the wrong BLS categories causes distorted inflation calculation
        • Using 10% method BLS category assignment approach where less-detailed BLS categories are used, but using a non 10% category inflation index approach (impermissible per IRS Regs.)
        • Uniform BLS category assignment to new items to ensure the same BLS indexes are applied to similar new vs. preexisting items
        • Including new items in calculation ensure compliance or reconstructing new item cost to avoid inflation dilution that’d otherwise occur
        • Performing inflation calculation reasonableness testing, setting criteria for identifying inflation outliers & establishing standard procedures for handling outliers
      • Calculating layers & decrements can be complex because it’s unknown whether there’ll be an increment or decrement in any given year & different math steps are required to calculate an increment vs. decrement(s)
      • Calculation errors become more inevitable the longer you’ve been on LIFO as decades worth of LIFO layers accumulate
    • Outsourced calculations or those made in-house WITH software
      • Make being on LIFO as simple as possible with outsourcing & minimize time spent on LIFO in-house with software
      • Reduces control & detection risk since all aspects of the calculation is automated using LIFOPro software
      • Simplifies audit procedures by providing comprehensive, user-friendly documentation
      • CPA firms & companies can rely on LIFOPro to serve as their LIFO subject matter expert rather than having to develop & maintain in-house expertise
      • Guarantee calculation accuracy & eliminate IRS audit risk
      • Easily obtain interim estimates to focus on forecasting & planning
      • Avoid getting bogged down with compliance work & getting hit with big LIFO surprises at year end
    • All of LIFOPro’s offerings come with the assurance of a SOC 1 Type II Report
  • Turnkey Outsourcing Solutions
    • Features
      • All tasks related to LIFO calculation & documentation outsourced to & managed by LIFOPro, including:
        • BLS category assignments (if applicable)
        • Inflation calculation, including new item cost reconstruction, exceptions & outlier analysis
        • LIFO reserve calculation
        • LIFO calculation documentation & storage
        • LIFOPro report package preparation
      • All clients receive LIFOPro report package electronically containing comprehensive calculation documentation, including summary amounts required to record LIFO-related accounting entries & tax return line items
      • Clients using external indexes (IPIC method) receive up to three interim estimates at no additional cost (using prior year product mix & year to date BLS inflation rates)
      • Flexible engagement structures to include supplemental services
      • Includes up to 40 hours of audit support
    • Benefits
      • Make being on LIFO as simple as possible
      • Simplifies audit procedures for companies & auditors by providing them with comprehensive, standardized documentation
      • Increase transparency & understandability by converting many years worth of files & documentation into a single user-friendly LIFO report package containing comprehensive documentation
      • Eliminate error-prone Excel spreadsheets, guarantee calculation accuracy & eliminate audit risk
      • Free up time to focus on LIFO forecasting & planning by eliminating time spent preparing/documenting calculation
  • LIFO Software
    • Features
      • Complete LIFO calculation & documentation automation for all dollar-value methodologies (excluding auto dealer alternative LIFO method inflation calculations; auto dealer IPIC LIFO inflation calculation is supported)
      • Automates all aspects of the LIFO calculation (excluding BLS category assignments), including:
        • Inflation calculation, including new item cost reconstruction, exceptions & outlier analysis
        • LIFO reserve calculation
        • LIFO calculation documentation & storage
        • Printing and/or saving all LIFOPro reports as PDF or Excel files
      • Separate stand-alone inflation calculation modules for internal & external (IPIC) indexes & both include a complete range of features & settings
      • Projections module provides on-demand, unlimited array of next year’s LIFO expense (income) figures
    • Benefits
      • Benefits for companies & CPA firms alike include:
        • Minimize time spent managing LIFO in-house
        • Guarantee calculation accuracy & eliminate errors
        • Replace error-prone spreadsheet formulas & Excel schedules with comprehensive, user-friendly reports
        • Ensure LIFO books & records are IRS Regs. compliant & minimize audit risk
        • Simplify calculation policies/procedures & reporting
        • Increase reporting transparency & understandability
        • Easily & quickly make interim estimates & ad-hoc projections
      • Additional benefits for CPA firms include:
        • Quickly perform LIFO benefit analysis for clients who are good candidates
        • Quickly confirm/verify LIFO calculation accuracy for audit/review clients
        • Create a highly profitable recurring revenue center by using the software to do all the LIFO heavy lifting & providing LIFO outsourcing services to clients
  • Turnkey Outsourcing Solutions Process Flow Chart

    First Year


  • Key Takeaways
    • LIFO tax benefits are primarily driven by inflation, so the timing of the LIFO election is key which makes it extremely important to incorporate LIFO into year end tax planning and annually ID clients that are good LIFO candidates
    • Because of this, CPA firms should annually ID clients that are good LIFO candidates as a part of the year end tax planning process to maximize the election year LIFO tax benefits
    • CPA firms play a key role in advocating for their clients to explore adopting LIFO because NO ONE ELSE WILL!
    • Due diligence should be performed prior to electing LIFO to weigh risks/rewards, set long-term expectations, ensure compliance, select the most appropriate submethods & maximize tax benefits
    • LIFO reviews should be periodically performed for companies already on LIFO for the following reasons
      • Identify errors & compliance issues
      • Quantify potential audit exposure and learn how certain changes can reduce/eliminate audit risk
      • Identify opportunities to utilize more optimal methods
    • LIFOPro’s resources provide CPA firms with all their LIFO needs
      • Generate or maximize revenues by engaging us directly & reselling our services to clients
      • Enhance ability to provide LIFO as a tax planning strategy without incurring costs & resources to do so
      • Place reliance on a LIFO subject matter expert and resource who can also serve as their client’s 3rd party LIFO service provider without having to maintain in-house LIFO expertise
    • LIFOPro’s offerings provide companies with all their LIFO needs
    • Companies can make being on LIFO as simple as possible with LIFOPro’s turnkey outsourcing solutions
    • Companies can minimize time spent in-house on LIFO & guarantee accuracy with our software
  • Actionable Items
  • Resources

Get Started Today!


Get a Free LIFO Benefit Analysis & Turnkey Outsourcing Solutions Fee Quote Today!

LIFOPro makes it simple for companies to quickly obtain accurate estimates of the projected tax savings from electing LIFO this year. Get your complimentary analysis PDF report & turnkey outsourcing solutions fee quote within one week of submitting your request!

Learn More

Estimate LIFO Tax Savings with LIFOPro's Calculator

Plug in your client's inventory balance, tax rate & year to date inflation rate to quickly estimate the projected tax savings from LIFO this year. Use LIFOPro's online inflation table to easily identify year to date inflation rates.

Learn More

Schedule a Call or Demo

Have a phone call or WebEx with the LIFO-PRO team to get started today or learn more about our offerings. Schedule online using our easy-to use booking tool.

Schedule Call or Demo

Request Forms

Request a complimentary LIFO Calculation, Methods & Best Practices Review Report, cost estimate or complete our online NDA at our Request Forms page.

Request Forms Page

Get a Software Trial, Analysis, Review or Cost Estimate

Trial the software for 90 days. Get a complimentary review. Request a cost estimate. Use our simple request form to get your complimentary offering today!


Sec. 473 Relief Estimate Request Form
Read more
Auto Dealer IPIC LIFO Case Study
Read more
2023 Top LIFO Opportunities & Strategies Guide
Read more
How LIFO Works: A Beginner’s Guide to LIFO
Read more
How to Identify Clients that are Good LIFO Election Candidates
Read more
How to Easily Implement LIFO
Read more
Complimentary Interim LIFO Estimate Request Form
Read more
Best LIFO Practices & Review
Read more
Auto Dealer LIFO Case Study
Read more
LIFO Election Benefit Analysis
Read more

Get information about LIFO-PRO’s offerings, valuable guides & white papers & sample LIFO reports!

Read more

Get educated on the Inventory Price Index Computation (IPIC) method, including the origins, advantages & disadvantages, calculation procedures, options & much more!

Read more
Service Organization Control Report

Learn how LIFO-PRO receives an annual review of our policies & procedures to provide required assurances to our clients.

Read more
LIFO Tax Benefit Calculator

Calculate the potential tax savings from using LIFO & determine your company’s historical inflation percentages!

Read more
Secure File Upload Portal

Here you can send us all files needed for us to seamlessly give you the best LIFO results possible. We look forward to working with you!

Read more
CPA Firm LIFO Opportunities & Training Guide

Learn about LIFO opportunities abound for CPA firms, how to increase the scope of your LIFO offerings & learn how to easily identify good LIFO candidates!

Read more
Interim Estimate Options

Learn how to easily make interim LIFO estimates manually or within our software!

Read more
Non-disclosure Agreement Request Form

Get a NDA generated electronically in less than a minute using LIFO-PRO’s online request form page & avoid having to print, sign & scan a paper NDA!

Read more
IPIC LIFO Resources

Learn how the IPIC LIFO Method works, find valuable Bureau of Labor Statistics (BLS) links and stay up to date on all changes related to the IPIC Method!

Read more
LIFO Success Stories

Learn about LIFOPro’s past roles in partnering with companies & CPA firms to deliver great value by finding solutions to the most challenging LIFO issues!

Read more
IPIC LIFO Overview

The Inventory Price Index Computation (IPIC) method allows taxpayers to use published external indexes to calculate inflation for the purpose of valuing LIFO inventories.

Read more
LIFO Methods, Rules & Regulations

Your comprehensive resource for authoritative LIFO guidance, LIFO election requirements, and method alternatives!

Read more
Supermarket Physical Count Procedures

Find helpful information on how IRS regulations effect grocery LIFO Count Procedures for CPI & PPI taxpayers on our Supermarket Count Procedures page.

Read more
Special Challenges for Supermarkets

Supermarkets face LIFO calculation issues unique to the industry. Find out why & answers to how they are dealt with Special Challenges for Supermarkets page.

Read more
Why the Double-extension LIFO Index Calculation Method is Unreliable

Facts describing why the double-extension LIFO index calculation method is unreliable and examples proving how this method creates unpredictable results.

Read more
Addition of Services Table 9 Codes

Find recent important changes & BLS addition of Table 9 Wherever-provided Services & Construction PPI Indexes & Important Change in PPI Code Structure page.

Read more
CPI Category Updates

Find information on CPI Category Changes & Bureau of Labor Statistics Consumer Price Index update information such as new medical commodity codes here!

Read more
PPI Category Updates

Learn IRS Regulations Requirements for missing PPI Indexes, procedures for reassigning discontinued PPI Categories at LIFO-PRO’s PPI Category Changes page.

Read more
Producer Price Index Usage by Supermarkets to Increase Tax Deferral

Learn how drugs, non-foods & food/beverage indexes cause increase LIFO tax benefits at our PPI Index Usage by Supermarkets to Increase Tax Deferral page.

Read more
BLS CPI & PPI Inflation History

Get the most up to date Bureau of Labor Statistics Consumer & Producer Price Index inflation data from LIFOPro!

Read more
IPIC LIFO Advantages

Switching from the double-extension to link-chain method? Want to achieve higher possible inflation indexes? Learn more at the IPIC LIFO Advantages page.

Read more
LIFO Repeal Updates

Get the latest LIFO repeal updates including the latest news on corporate tax reform at LIFO-PRO’s LIFO Repeal Updates page.

Read more
LIFOPro Videos

LIFO-PRO Company Overview – Quick 1 minute video explaining LIFO-PRO’s service and software offerings.

Read more
Request Forms Page

Request a software trial, LIFO Election Benefit Analysis, Best LIFO Practices Methods Review or cost estimate. All of our requests are complimentary & free of obligation!

Read more

View some of our frequently asked questions to learn more about LIFO

Read more
LIFO Glossary

Accounting and financial professionals who work with LIFO need to understand the jargon associated with LIFO. Below are a number of LIFO-related terms.

Read more
What Makes a Good LIFO Candidate?

Get answers to who should use the LIFO method, how much LIFO may benefit your company or client & good LIFO candidates by industry & principal business activity along with historical inflation data.

Read more
How LIFO Works

Hundreds of companies & CPA firms utilize our LIFO outsourcing solutions or the LIFO-PRO software for turnkey LIFO solutions.

Read more

Subscribe Today

Sign up today to receive industry news & promotional offers from LIFO-PRO