Fillable Form 3115 - Application For Change In Accounting Method (Page 5 of 8) in pdf

Form 3115 (Rev. 12-2015)

Page

Schedule B—Change to the Deferral Method for Advance Payments (see instructions)

If the applicant is requesting to change to the deferral method for advance payments described in section 5.02 of Rev. Proc.

2004-34, 2004-1 C.B. 991, attach the following information:

a A statement explaining how the advance payments meet the definition in section 4.01 of Rev. Proc. 2004-34.

b If the applicant is filing under the automatic change procedures, the information required by section 8.02(3)(a)–(c) of

Rev. Proc. 2004-34.

c If the applicant is filing under the non-automatic change procedures, the information required by section 8.03(2)(a)–(f)

of Rev. Proc. 2004-34.

If the applicant is requesting to change to the deferral method for advance payments described in Regulations section

1.451-5(b)(1)(ii), attach the following information:

a A statement explaining how the advance payments meet the definition in Regulations section 1.451-5(a)(1).

b A statement explaining what portions of the advance payments, if any, are attributable to services, whether such services are

integral to the provisions of goods or items, and whether any portions of the advance payments that are attributable to

non-integral services are less than five percent of the total contract prices. See Regulations sections 1.451-5(a)(2)(i) and (3).

c A statement explaining that the advance payments will be included in income no later than when included in gross receipts for

purposes of the applicant’s financial reports. See Regulations section 1.451-5(b)(1)(ii).

d A statement explaining whether the inventoriable goods exception of Regulations section 1.451-5(c) applies and if so, when

substantial advance payments will be received under the contracts, and how the exception will limit the deferral of income.

Schedule C—Changes Within the LIFO Inventory Method (see instructions)

Part I

General LIFO Information

Complete this section if the requested change involves changes within the LIFO inventory method. Also, attach a copy of all

Forms 970, Application To Use LIFO Inventory Method, filed to adopt or expand the use of the LIFO method.

Attach a description of the applicant’s present and proposed LIFO methods and submethods for each of the following

items:

a Valuing inventory (for example, unit method or dollar-value method).

b Pooling (for example, by line or type or class of goods, natural business unit, multiple pools, raw material content, simplified

dollar-value method, inventory price index computation (IPIC) pools, vehicle-pool method, etc.).

c Pricing dollar-value pools (for example, double-extension, index, link-chain, link-chain index, IPIC method, etc.).

d Determining the current-year cost of goods in the ending inventory (such as, most recent acquisitions, earliest acquisitions during

the current year, average cost of current-year acquisitions, rolling-average cost, or other permitted method).

If any present method or submethod used by the applicant is not the same as indicated on Form(s) 970 filed to adopt or

expand the use of the method, attach an explanation.

If the proposed change is not requested for all the LIFO inventory, attach a statement specifying the inventory to which the

change is and is not applicable.

If the proposed change is not requested for all of the LIFO pools, attach a statement specifying the LIFO pool(s) to which the

change is applicable.

Attach a statement addressing whether the applicant values any of its LIFO inventory on a method other than cost. For

example, if the applicant values some of its LIFO inventory at retail and the remainder at cost, identify which inventory items

are valued under each method.

If changing to the IPIC method, attach a completed Form 970.

Part II

Change in Pooling Inventories

If the applicant is proposing to change its pooling method or the number of pools, attach a description of the contents of, and

state the base year for, each dollar-value pool the applicant presently uses and proposes to use.

If the applicant is proposing to use natural business unit (NBU) pools or requesting to change the number of NBU pools,

attach the following information (to the extent not already provided) in sufficient detail to show that each proposed NBU was

determined under Regulations sections 1.472-8(b)(1) and (2):

a A description of the types of products produced by the applicant. If possible, attach a brochure.

b A description of the types of processes and raw materials used to produce the products in each proposed pool.

c If all of the products to be included in the proposed NBU pool(s) are not produced at one facility, state the reasons for the

separate facilities, the location of each facility, and a description of the products each facility produces.

d A description of the natural business divisions adopted by the taxpayer. State whether separate cost centers are maintained

and if separate profit and loss statements are prepared.

e A statement addressing whether the applicant has inventories of items purchased and held for resale that are not further

processed by the applicant, including whether such items, if any, will be included in any proposed NBU pool.

A statement addressing whether all items including raw materials, goods-in-process, and finished goods entering into the

entire inventory investment for each proposed NBU pool are presently valued under the LIFO method. Describe any items that

are not presently valued under the LIFO method that are to be included in each proposed pool.

3115

Form

(Rev. 12-2015)

Form 3115 - Application For Change In Accounting Method Page 5

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