LIFO inventory valuation method.

Does anyone believe that LIFO (Last in, First out) is a fair inventory valuation method. If so please explain why or why not in enough detail.

Thanks everyone, and god bless all :-))
Anonymous User
Anonymous User
Asked Aug 01, 2011
In periods of rising costs, LIFO will produce the greatest cost of goods sold, thus the lowest net income and FIFO will have the opposite effect. In terms of fairness, not accounting, actual cost for inventories that are bought by the unit and average cost for bulk inventory will produce the most accurate cost and net income numbers. There was a time when doing it manually would have made actual cost very difficult but computers have greatly simplified the process.

What is fair most often is followed by the question, "to whom?" In my view, factual accuracy always trumps an opinion of what is fair.



Rob
Answered Aug 01, 2011

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