IAS 2 bars LIFO, while U.S. GAAP allows LIFO inventory accounting.

The Claim

International Financial Reporting Standards (IFRS) prohibit the use of the Last-In, First-Out (LIFO) inventory costing method, while U.S. Generally Accepted Accounting Principles (U.S. GAAP) permit the use of LIFO in some circumstances.

Verified by Lenz · Aug 6, 2026

The Short Version

Authoritative accounting standards support both parts of the statement. IAS 2 under IFRS expressly disallows LIFO for inventory costing, while U.S. GAAP allows LIFO under ASC 330, including within the U.S. tax conformity framework. The phrase "in some circumstances" is slightly narrow, but it does not change the practical takeaway.

Caveats

"In some circumstances" slightly understates U.S. GAAP's breadth; LIFO is broadly permitted, not rarely allowed.
The claim concerns financial reporting rules, not whether LIFO is preferable or tax-efficient.
Practical use can still depend on related tax and regulatory requirements, especially in the United States.

The Receipts

1.4 Inventories | DART – Deloitte Accounting Research Tool
Deloitte
6.16 Inventory costing
PwC Viewpoint
International Accounting Standard 2 Inventories
IFRS FoundationJan 1, 2026
Inventory accounting: IFRS® Accounting Standards vs US GAAP
KPMGJan 1, 2026
IAS 2 — Inventories
IAS PlusDec 18, 2003
Handbook: Inventory
KPMG International
AICPA Issues Paper — Identification and Discussion of Certain Financial Accounting Reporting Issues
Deloitte DART
Is LIFO an allowable inventory costing method under IFRS?
PwC Viewpoint
Why Is LIFO Prohibited Under IFRS?
LegalClarity
Comparing FIFO and LIFO Inventory Valuation Methods
InvestopediaJun 6, 2002

+ 13 more sources — see the full list on Lenz

Filed Under

Accounting Standards Codification Topic 330International Accounting Standard 2International Financial Reporting StandardsLast-In, First-OutU.S. Generally Accepted Accounting Principles