Under which accounting framework is the LIFO inventory method prohibited?

The LIFO (Last In, First Out) inventory method is prohibited under IFRS (International Financial Reporting Standards). This prohibition stems from the IFRS framework's emphasis on reflecting a more accurate representation of current costs in inventory accounting. Under IFRS, inventory is required to be valued using methods that best align with natural flow of goods and the economic reality of the inventory turnover, which leads to the acceptance of methods such as FIFO (First In, First Out) and weighted average cost but excludes LIFO.

In contrast, the LIFO method is permissible under US GAAP (Generally Accepted Accounting Principles), allowing companies to use this approach as it can provide tax benefits in certain economic conditions, particularly during periods of rising prices. Therefore, the correct answer aligns with the regulatory distinctions regarding inventory accounting between IFRS and US GAAP, emphasizing the restrictions in the international framework.