Firm Size and Regulatory Compliance Costs: The Case of LIFO Regulations

Authors:
John C. Hilke

This report presents and analyzes empirical data on the costs of complying with regulations governing the use of LIFO, an inventory accounting system that allows firms to adjust their stated earnings to reflect the effects of inflation. The conclusion is that LIFO regulations have imposed compliance costs that are proportionately much larger for small firms than for large firms.