LIFO vs FIFO
Also called: LIFO, FIFO, inventory costing method
FIFO assumes the oldest inventory sells first; LIFO assumes the newest does. In an inflationary period LIFO reports higher COGS and lower profit — and therefore lower tax, which is the whole reason US firms use it. IFRS bans LIFO entirely, so a US company can report materially different profit than an identical European one. LIFO reserves disclosed in the notes let you convert between them.
Where this is taught
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