The LIFO Pooling Decision: Some Empirical Results from Accounting Practice.

This article focuses on managerial decisions involved in pooling last-in-first-out (LIFO) inventories in the U.S. The financial reporting justification for the LIFO pooling decision is based on matching. The matching principle offers virtually no concrete guidance about LIFO pooling. For income tax purposes, practitioners generally recommend that companies try to minimize the number of LIFO pools. The use of fewer pools allows inventory reductions of some items to be offset by inventory increases in others.