FIFO
Learn how first in, first out assigns older inventory costs to cost of goods sold, with a worked example and comparison with LIFO and weighted average.
Accounting terms for FIFO, first-in first-out, and LIFO inventory flow assumptions.
Inventory Flow Assumptions covers FIFO, first-in first-out, and LIFO inventory flow assumptions.
Use these pages when inventory accounting changes gross margin, working capital, taxable income, obsolescence risk, or cash-conversion analysis. It sits inside Inventory Accounting, so readers can move up when the broader accounting context matters.
Use the table below to choose the narrower accounting branch before applying a term to a statement line, model input, audit trail, tax schedule, covenant test, or management report.
| Area | Use it for |
|---|---|
| FIFO | FIFO is an inventory cost-flow assumption that assigns the oldest costs to cost of goods sold and leaves newer costs in ending inventory. |
| First-in, First-Out | Inventory cost-flow assumption that treats the earliest purchased goods as sold first, affecting COGS and inventory values. |
| LIFO | LIFO is an inventory cost-flow assumption that assigns the most recent costs to cost of goods sold before older inventory costs. |
Inventory-accounting content is educational and does not provide accounting, tax, audit, legal, inventory-management, investment, or valuation advice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Learn how first in, first out assigns older inventory costs to cost of goods sold, with a worked example and comparison with LIFO and weighted average.
Learn how last in, first out assigns recent inventory costs to cost of goods sold, including layers, LIFO liquidation, reserve analysis, and IFRS differences.