LIFO Reserve

The difference between inventory calculated using FIFO inventory method and inventory calculated using LIFO.

Using LIFO usually generates a larger deduction than FIFO, decreasing a company’s income tax. Figuring the LIFO reserve helps companies figure out how much larger that deduction was and just how much tax was deferred.

https://accounting.uworld.com/cpa-review/lc/accounting-dictionary/term/lifo-reserve/