LIFO, FIFO and now TYPO: IRS Approves new accounting method

The Internal Revenue Service announced April 1 that it was approving a third accounting method called TYPO. Continue reading

The Internal Revenue Service announced April 1 that it was approving a third accounting method called TYPO. This new method will join LIFO and FIFO as a government-approved way to manage and calculate the cost of inventory.

LIFO stands for “last in first out,” with the most recent (last) unit considered sold first. FIFO stands for “first in first out,” with the oldest (first) unit considered sold first.

The IRS announcement did not state what TYPO stands for or how it works.

Observers were surprised and confused. “Are you sure that’s not a mistake?” was the reaction from Deb It, spokesperson for the American Society of Accountants.

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