FIFO { First In First Out }

FIFO stands for First in First out. It is a method of keeping count of the value of the inventory held by a company or organization and stands that the inventory that was added first to the stock will also be removed from the stock first.

Benefits of FIFO

  • FIFO is the most used method worldwide.
  • Financial and income statements are harder to manipulate under the FIFO method.
  • Cost flow layers are simple.
  • More accurate match of inventory cost to current market value and gives a truer idea of inventory value and replacement costs.
  • FIFO fosters a higher gross income as the cost of goods sold is usually lower.
  • Easy to create a more intuitive flow of goods.
cookie image

By clicking “Accept", you consent to our website's use of cookies to give you the most relevant experience by remembering your preferences and repeat visits. You may visit "cookie policy” to know more about cookies we use.