Last In, First Out (LIFO)
An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold or disposed of first. Investopedia Says:
LIFO assumes that an entity sells, uses or disposes of its newest inventory first. If an asset is sold for less than it is acquired for, then the difference is considered a capital loss. If an asset is sold for more than it is acquired for, the difference is considered a capital gain. Using the LIFO method to evaluate and manage inventory can be tax advantageous, but it may also increase tax liability. Related Terms:
Capital Gain
Capital Loss
Carrying Cost of Inventory
Cost of Goods Sold - COGS
First in First Out - FIFO
First In, Still Here - FISH
Highest In, First Out - HIFO
Inventory
Inventory Turnover
LIFO Liquidation |