US LIFO Inventory
Dollar-value LIFO pools, annual layer worksheet, IPIC/internal index deflation, LIFO-reserve computation and a balanced book-to-LIFO adjusting journal entry.
Dollar-value LIFO pools, annual layer worksheet, IPIC/internal index deflation, LIFO-reserve computation and a balanced book-to-LIFO adjusting journal entry.
Key Features
dollar-value LIFO for tax (and often GAAP) purposes
Once the election is made, the accountant must, every year, deflate the ending inventory back to
base-year prices, decide whether the year added a
base-year prices, decide whether the year added a new LIFO layer (an increment) or eroded one (a liquidation), value each surviving layer at the price index of the year it was created, and finally book the
LIFO reserve
LIFO reserve — the difference between current-cost (FIFO) inventory and LIFO inventory — through a balanced book-to-LIFO adjusting entry.
LIFO pools
LIFO pools — group items that move together into a pool with a base year and a base-year cost (the original base layer in base-year dollars).
Price-index methods
Price-index methods — compute the cumulative index two ways:
Internal / double-extension
Internal / double-extension — list the ending-inventory items with a quantity, a current-year unit cost and a base-year unit cost. The module extends both columns; the cumulative index is current-cost ÷ base-cost.
IPIC / external index
IPIC / external index — enter the cumulative index directly (for example a BLS PPI/CPI-derived index) together with the current-cost ending inventory.
Base-dollar deflation
Base-dollar deflation — divides the current-cost ending inventory by the cumulative index to express it in base-year dollars.
Increment / liquidation detection
Increment / liquidation detection — compares the deflated ending inventory with the sum of the existing layers. A rise creates a new layer at this year's index; a fall peels prior layers off in LIFO order.
Layer valuation
Layer valuation — every layer carries the index of its origin year, so the LIFO inventory value is the sum of layer base dollars × layer index.
LIFO reserve
LIFO reserve — current-cost inventory minus LIFO inventory, with the year-over-year change that drives the journal.
Balanced adjusting entry
Balanced adjusting entry — one click posts a two-line account.move (move_type entry): the change in the reserve is debited to the LIFO adjustment expense / cost-of-goods-sold account and credited to the LIFO reserve (contra-inventory) accou
Why Choose This Module
Everything stays inside Odoo Accounting. Nothing is transmitted to any tax authority and no registration or certification is required — this is a working-paper and posting tool for your accountant.
Specifications
- Compatible: Odoo 18.0 / 19.0
- License: OPL-1
- Languages: English
- Author: Pokutsoft
- Dependencies: account
- Support: support@pokutsoft.com
Update date: 2026-07-05