Trex adopts Link Chain LIFO accounting
Winchester, Va.-based Trex Co, announced a change in its accounting for inventories from a specific goods last in, first out (LIFO) approach to a Link Chain LIFO method.
The new method is preferable for several reasons, according to Trex:
• It is based on a single inventory pool, instead of more than 30 LIFO pools under the prior method, simplifying the LIFO calculation;
• It provides better matching of sales and expenses by creating fewer LIFO liquidations; and
• It aligns the Company’s inventory costing method with prevalent inventory practice.
The change to the Link Chain LIFO method is effective during the 2010 fourth quarter and affected periods subsequent to December 31, 2006.
Trex is a leading manufacturer of wood-alternative decking.