Issue Date: Dealer Business Briefings Jun 15, 2006, Posted On: 6/15/2006
NEWS YOU CAN USE
Although a bill proposed in Congress to do away with LIFO - triggered by fattening oil company profits - has pretty much been tabled, CPA Dave Wiggins of Davis, Keller & Wiggins, LLC in St. Louis, MO, says this could still be an issue. If the U.S. moves more towards international accounting standards, which don't recognize LIFO, this method of inventory accounting could go away, he says. Congress is still looking at the LIFO issue and Mr. Wiggins told us he thinks informal discussions are being held.
"This would have a devastating effect on dealerships," says Mr. Wiggins, who says most new car dealers are on LIFO. Auto Team America, a consortium of CPA firms (including DKW) that provide accounting and consultation to dealerships nationwide, is gathering information on this issue to assist accounting rule makers and Congress in considering new rules or tax law changes. By helping with these "grassroots" efforts to assist dealers, ATA firms hope to make sure that accounting changes or legislation passed will consider the effects to automobile and truck dealers.
Talk to your CPA about the status of LIFO. You or your state dealer association should also let your congressmen know your opinion. For the most recent status on this issue, contact Mr. Wiggins (800-875-4285) or a local ATA firm (www.autoteamcpa.com).