Final answer:
Dollar-value LIFO techniques aim to protect LIFO layers from erosion and help maintain accurate inventory valuation.
Step-by-step explanation:
Dollar-value LIFO (Last In, First Out) techniques aim to protect LIFO layers from erosion and help maintain accurate inventory valuation. By adjusting the inventory layers for changes in prices, dollar-value LIFO takes into account both the changes in inventory quantities and prices. This allows companies to preserve the inventory layers and prevent erosion, ensuring more accurate financial reporting.
For example, let's say a company uses LIFO for its inventory valuation method. If the prices of inventory items increase over time, the LIFO layers may erode, meaning newer inventory layers are valued at higher prices while older layers are valued lower. Dollar-value LIFO helps mitigate erosion by adjusting the inventory layers based on both price and quantity changes.
Therefore, the statement is True. Dollar-value LIFO techniques help protect LIFO layers from erosion, allowing companies to maintain accurate inventory valuation.