Final answer:
The statement is true; IFRS does not allow LIFO, leading to complexities when comparing financial statements of international companies with those of US companies that may use LIFO under GAAP.
Step-by-step explanation:
The statement 'LIFO is not allowed by the IFRS which makes comparisons of international companies with US companies difficult' is true. IFRS, short for International Financial Reporting Standards, does not permit the use of the Last-In, First-Out (LIFO) method for inventory accounting, whereas the Generally Accepted Accounting Principles (GAAP) in the United States do allow for LIFO.
Under IFRS, companies are typically required to use the First-In, First-Out (FIFO) or the weighted average cost method when reporting inventory costs. Since LIFO often results in different cost of goods sold (COGS) and inventory values on the balance sheet compared to FIFO or weighted average cost, it impacts financial ratios and the bottom line reported by companies.