An executive with Tao & Willis, Inc. (TW), is faced with choosing an inventory accounting method for a new Brazilian subsidiary of a U.S.-based company. Students are asked to assess the different profit implications of LIFO and FIFO for five years of data. During the time period, exchange rates between Brazil and the United States had been fluctuating significantly. This case focuses on the basics of inventory accounting in an interesting international context, and can be used in graduate or undergraduate business courses, specifically those teaching the fundamentals of financial accounting.
Darden Business Publishing – University of Virginia