REVENUE RULE 90-6

1990-1 C.B. 111, 1990-5 I.R.B. 9.

Internal Revenue Service
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: January 29, 1990

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The October 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, October 31, 1989.

The following price indexes for October 1989 were issued by the Bureau of Labor Statistics on November 24, 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, October 31, 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)

Groups October 1988/October 1989/Percent Change from Oct. 1988 to Oct. 1989 [Fn1]
1. Piece Goods 416.4 412.2 -1.0
2. Domestics and Draperies 606.4 603.5 -0.5
3. Women's and Children's Shoes 599.1 602.7 0.6
4. Men's Shoes 825.5 838.5 1.6
5. Infants' Wear 560.3 570.9 1.9
6. Women's Underwear 467.5 477.3 2.1
7. Women's Hosiery 242.3 246.3 1.7
8. Women's and Girls' Accessories 508.5 534.1 5.0
9. Women's Outerwear and Girls' Wear 407.3 407.7 0.1
10. Men's Clothing 542.2 559.4 3.2
11. Men's Furnishings 525.8 537.2 2.2
12. Boys' Clothing and Furnishings 466.8 469.9 0.7
13. Jewelry 786.9 816.9 3.8
14. Notions 503.0 539.3 7.2
15. Toilet Articles and Drugs 714.1 742.7 4.0
16. Furniture and Bedding 586.3 587.2 0.2
17. Floor Coverings 502.9 508.5 1.1
18. Housewares 730.2 732.2 0.3
19. Major Appliances 249.1 245.5 -1.4
20. Radio and Television 94.3 92.2 -2.2
21. Recreation and Education [fn2] 107.4 108.9 1.4
22. Home Improvements [fn2] 105.1 110.5 5.1
23. Auto Accessories [fn2] 102.8 105.1 2.2
Groups 1 - 15: Soft Goods 539.1 547.7 1.6
Groups 16 - 20: Durable Goods 452.3 450.0 -0.5
Groups 21 - 23: Misc. Goods [fn2] 106.1 108.4 2.2
Store Total [fn3] 509.2 515.3 1.2

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 Eliot L. Kaplan of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling contact Mr. Kaplan on (202) 343-2383 (not a toll-free call).

Rev. Rul. 90-6, 1990-1 C.B. 111, 1990-5 I.R.B. 9.