Q56, please explain answer and options
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In the period of rising prices of inventory, LIFO can benefit from tax but as per IFRS companies cannot use LIFO method, they cannot liquidate inventory because they are already using FIFO
management can influence analysts ‘ opinions by playing with other methods like
increasing the useful life of assets that is by following straight-line method or such depreciation methods decreasing salvage value etcetera…..
And also by emphasizing earnings that exclude nonrecurring Costs.
And as obvious in this question they are asking about the least likely influence.
I hope this will help.
Okay understood. what does liquidating inventory mean tho?