Two common ways for companies to account for inventory are first-in/first-out, or FIFO, and last-in/last-out, or LIFO. In FIFO, the first units that arrive in the business are the first sold. In LIFO, ...

A lot depends on the nature of your business. In some cases accounting methods can actually be part of your business strategy; inventory accounting is one of those methods. Specific identification ...

The acronyms FIFO and LIFO identify methods for figuring the cost of goods sold when the price of your inventory has changed over time. With LIFO, you determine the price by assuming the most recent ...

While LIFO produces a lower tax liability, the FIFO method tends to report a higher net income, which can make the company more attractive to shareholders. It also reports a higher value for current ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Charlene Rhinehart is a CPA , CFE, chair of ...

The selection by an entity of its company structure, its fiscal year and its method of accounting are the three main mechanisms that a company can employ in performing substantial tax planning, ...

When it comes time for businesses to account for their inventory, businesses may use the following three primary accounting methodologies: FIFO stands for "first in, first out," where older inventory ...

Home Depot, Inc. announced a key change in accounting principals in its third quarter filing with the SEC. After adopting a new enterprise resource planning system, otherwise known in the ...

Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues ...

Since 1939, when the Tax Code's treatment of inventory was modified to permit LIFO, managers and accountants have faced a tri-lemma in that they have to choose among FIFO, LIFO and average flow ...

Many retailers have used the LIFO (last in, first out) accounting method to manage their inventory reporting. The methods assumes that the last unit to arrive in inventory (the most recent) is sold ...