The Treasury Department and IRS issued final regulations under Section 471 designed to prevent retailers from achieving accounting distortions when computing ending inventory values under the retail inventory method.  The final regulations, effective August 15, 2014, restate and clarify the computation of ending inventory values under the retail inventory method and provide a special rule for certain taxpayers that receive margin protection payments or vendor allowances that are required to reduce only cost of goods sold.  

The regulations can be accessed via: TD 9688.pdf.

The IRS also released Revenue Procedure 2014-48, which contains the exclusive procedures by which a taxpayer obtains the consent of the Commissioner under Section 446(e) to make certain changes within the retail inventory method to comply with the final regulations.