Rev. Rul. 89-71
1989-1 C.B. 165, 1989-21 I.R.B. 6.
Internal Revenue Service
Revenue Ruling
LIFO; PRICE INDEXES; DEPARTMENT STORES
Published: May 22, 1989
Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The February 1989 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference, to February 28, 1989.
The following price indexes for February 1989 were issued by the Bureau of Labor Statistics on March 23, 1989, for use by department stores, and are accepted by the Internal Revenue Service, under section 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, February 28, 1989.
Indexes are prepared on a national basis for the store total, for 23 major groups of departments, and for three special combinations -- soft goods, durable goods and miscellaneous goods. The store total index covers all departments, including some not
listed separately, with the following exceptions: candy, foods, liquor, tobacco, as well as contract departments.
BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY
DEPARTMENT GROUPS
(January 1941 = 100 unless otherwise noted)
Percent
Change
from
October
October October 1987 to
October
Groups 1987 1988 1988 [FN1]
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1. Piece Goods ........................ 397.7 418.3 5.2
2. Domestics and Draperies ............ 583.8 607.9 4.1
3. Women's and Children's Shoes ....... 545.2 577.4 5.9
4. Men's Shoes ........................ 778.9 831.0 6.7
5. Infants' Wear ...................... 537.1 564.5 5.1
6. Women's Underwear .................. 437.0 470.8 7.7
7. Women's Hosiery [FN2] .............. 237.6 245.3 3.2
8. Women's and Girl's
Accessories ...................... 480.1 502.3 4.6
9. Women's Outerwear and Girl's
Wear ............................. 360.7 367.4 1.9
10. Men's Clothing ..................... 496.5 526.4 6.0
11. Men's Furnishings .................. 498.7 520.4 4.4
12. Boys' Clothing and
Furnishings ...................... 431.2 442.5 2.6
13. Jewelry ............................ 752.5 790.2 5.0
14. Notions ............................ 495.8 523.6 5.6
15. Toilet Articles and Drugs .......... 693.7 726.2 4.7
16. Furniture and Bedding .............. 565.5 580.8 2.7
17. Floor Coverings .................... 488.8 492.0 0.7
18. Housewares ......................... 728.3 734.0 0.8
19. Major Appliances ................... 243.6 251.1 3.1
20. Radio and Television ................ 95.6 94.1 -1.6
21. Recreation and Education
[FN3] ............................ 103.8 107.8 3.9
22. Home Improvements [FN3] ............ 105.1 108.3 3.0
23. Auto Accessories [FN3] ............. 102.2 104.4 2.2
Groups 1-15: Soft Goods ....................... 502.8 524.1 4.2
Groups 16-20: Durable Goods ................... 447.9 452.4 1.0
Groups 21-23: Misc. Goods [FN3] ............... 103.7 107.2 3.4
Store Total ........................ 486.1 502.1 3.3
FN1. Absence of a minus sign before percentage change in this column signifies
price increase.
FN2. Title reflects change in item sampling structure made during 1978 CPI
Revision whereby Girls' Hosiery was included in Group 8, Women's and Girl's
Accessories, not Group 7.
FN3. Indexes on a January 1986 = 100 base.
DRAFTING INFORMATION
The principal author of this revenue ruling is Kevin M. Curran of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling contact Mr. Curran on (202) 566-3024 (not a toll-free call).
Rev. Rul. 89-71, 1989-1 C.B. 165, 1989-21 I.R.B. 6.