Revenue Ruling 2006-53, LIFO; Price Indexes; Department Stores

LIFO; price indexes; department stores. The August 2006 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, August 31, 2006.

The following Department Store Inventory Price Indexes for August 2006 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under § 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, August 31, 2006.

The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted)
Groups		Aug 2005	Aug 2006	Percent Change from Aug 2005 to Aug 2006¹
1.	Piece Goods	486.8	457.5	-6.0
2.	Domestics and Draperies	512.2	486.2	-5.1
3.	Women’s and Children’s Shoes	661.5	671.9	1.6
4.	Men’s Shoes	875.1	877.5	0.3
5.	Infants’ Wear	554.0	563.9	1.8
6.	Women’s Underwear	542.8	534.2	-1.6
7.	Women’s Hosiery	339.1	340.6	0.4
8.	Women’s and Girls’ Accessories	585.4	531.7	-9.2
9.	Women’s Outerwear and Girls’ Wear	331.2	341.4	3.1
10.	Men’s Clothing	527.1	517.3	-1.9
11.	Men’s Furnishings	557.0	551.5	-1.0
12.	Boys’ Clothing and Furnishings	384.1	384.3	0.1
13.	Jewelry	888.5	916.9	3.2
14.	Notions	810.5	823.5	1.6
15.	Toilet Articles and Drugs	998.0	995.5	-0.3
16.	Furniture and Bedding	598.5	603.3	0.8
17.	Floor Coverings	614.0	622.4	1.4
18.	Housewares	708.6	697.7	-1.5
19.	Major Appliances	203.9	203.5	-0.2
20.	Radio and Television	38.7	35.5	-8.3
21.	Recreation and Education²	77.3	76.3	-1.3
22.	Home Improvements²	136.0	140.3	3.2
23.	Automotive Accessories²	115.9	121.2	4.6

Groups 1-15: Soft Goods		544.8	544.9	0.0
Groups 16-20: Durable Goods		378.6	373.1	-1.5
Groups 21-23: Misc. Goods²		92.6	93.6	1.1

	Store Total³	485.7	484.9	-0.2

¹Absence of a minus sign before the percentage change in this column signifies a price increase.
²Indexes on a January 1986 = 100 base.
³The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco and contract departments.

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