Regulatory Compliance Costs and LIFO: No Wonder Small Companies Haven't Switched

The widespread decision of small companies to avoid using LIFO is discussed as a function of the difficulties that companies have in complying with LIFO requirements. 1983 survey estimates indicate that small companies face considerably higher costs in switching to LIFO than do large companies. Both large and small companies could save a large proportion of their LIFO conversion costs if LIFO regulations were modified to permit use of government price indexes in determining price changes.