LIFO Liquidation

This video discusses the concept of LIFO liquidation. The erosion of old inventory layers can sometimes lead to dramatically higher profit, since the older inventory was likely purchased at a much lower price than the current market rate. This video provides an example to illustrate how such LIFO liquidation occurs and how firms attempt to address this by pooling inventory items.
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[@lapatria100]

the "that's a little abstract so let's get into an example...let's say you sell HORSE MANURE" bit got me good.

[@eskay436]

My goodness, now I finally understand what LIFO Liquidation is. I was so confused about how this concept works after hours of reading the textbook and watching videos. Your explanation was perfect for me to understand this. Thank you.

[@smitaaay]

Thanks for this video. There was a goofy problem in my book with absolutely NO explanation, and this cleared it up. I really appreciate it.

[@Edspira]

Great. I'm glad you found this video useful!

[@MyFinancialFocus]

Creative accounting!

[@3650days]

Thank you! How I wish you would be my professor.......

[@faezehjanipour3474]

Your tutorials are great!! Thank you very much.⚘⚘⚘

[@horochan13]

wonderful lecture!

[@user-hb9tf4yp9n]

Thank you so much for the video. Super helpful!

[@yu6601]

So good! I hope there are more explanation about LIFO liquidation to profit, revenue and COGS etc.

[@lindsay5752]

so helpful!

[@doctorjay1976]

Horse manure... your sense of humor is legendary

[@kellywang2597]

Hi there, thank you for such a great tutorial video, it helps me a lot! But I'm still a little bit confused with the concept of "pooling LIFO approach". I understand it's designed to help solve the liquidation but I'm not clear with how it works in practice. Let's say the company has ABCD 4 product lines, and then it combines A&B into a pool in order to alleviate the LIFO liquidation of A. But when we prepare a P/L statement for product A only, it still faces liquidation problem. And if we prepare a P/L for A&B together, it may means nothing from the business point of view(for example A is apple pie and B is ketchup). And after all, at the end of the year when we report the P/L for the whole company wise, no matter there's pooling of inventory or not, all of the inventory will be included in the final statements, then what's the meaning of this pooling concept? I've thought about it for a long time but really can not figure it out by myself. Could you pls help me out here? Thanks!

[@infamismworldwild6248]

Thank you

[@sm6081]

best horse shit example...thanks!!

[@evapadilla653]

Thanks for sharing!

[@Edspira]

No problem!

[@clairew1218]

thank you! it helps a lot

[@Edspira]

glad to help!

[@shokhnurfayzulloev8730]

Thank you for your tutorials! I am learning ACCA F2 and your lectures are very useful!

[@Edspira]

Awesome. Thanks Shokhnur!

[@nicktanner8231]

I am really dumb so I am trying to dumb this down to my own understanding level. Is this a correct description of what is going on here: we are adjusting old layers of costs from prior years that have not been dug into/ recognized thus still remain on as an asset for inflation? we are adding the cost of inflation to old layers because they are not the true cost in the past. the reason they have increased may not have been due to a change in economy (supply or demand may have been equal for the inventory) rather just due to inflation? Thanks

[@jasonfrank5394]

who would have thought that horse manure would be an appreciating asset! thanks for the video. would hate to be the people eating into the inventory when it's horse manure though... 😂

[@franciscodasis4376]

Its 2021 and horse manure is 5$/pound....how did you know!?

[@antonioromero878]

800lbs of poop !!!