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Could you explain: "Interim statements should not reflect the effect of a lifo liquidation if the...

Could you explain: "Interim statements should not reflect the effect of a lifo liquidation if the units of beginning inventory sold are expected to be replace by year-end". Thanks.

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The statement  "Interim statements should not reflect the effect of a LIFO liquidation if the units of beginning inventory sold are expected to be replace by year-end" means that inventory should not be written down to a lower market value if the market value is expected to recover above the inventory's cost by year-end; and planned variances under a standard cost system should not be reflected in interim statements if they are expected to be absorbed by year-end. It is one of the several items which require special treatment for the interim statements to better reflect the expected annual amounts.

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