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Last In / First Out (LIFO)

What is the Last In / First Out method?

Last In / First Out is an accounting method used in managing a company's inventory. LIFO assumes that the products bought or most recently manufactured are sold first.

The International Financial Reporting Standards prohibits the use of LIFO accounting method. However, LIFO is not prohibited under the US GAAP and that makes the United States the only country using the LIFO method as an accounting principle.