Discussion of “Inventory accounting and earnings/price ratios: A Puzzle”

In summary, when we avoid the temptation to assume the ceteris paribus opener, and allow for systematic differences in the characteristics of LIFO and FIFO firms, we can view this paper in a different light. Rather that presenting anomalous or puzzling findings, it instead provides evidence of another dimension along which LIFO and FIFO firms may systematically differ; a dimension which appears consistent with several existing theories of accounting choice and with previous empirical findings.