In the inflationary situation which method of inventory valuation would you prefer, LIFO or FIFO?
In the accounting procedure of a firm’s inventory valuation there are two well known methods, which are widely used. The methods are LIFO shortened for “Last in first out” and FIFO elaborated as “First in first out”. The consideration of any of these methods in the inventory valuation process affects not only the value of inventory but the entire procedure from the value of inventory to the income tax calculation is influenced.
In the accounting procedure of a firm’s inventory valuation there are two well known methods, which are widely used. The methods are LIFO shortened for “Last in first out” and FIFO elaborated as “First in first out”. The consideration of any of these methods in the inventory valuation process affects not only the value of inventory but the entire procedure from the value of inventory to the income tax calculation is influenced.
