LIFO

What is LIFO?

Last In First Out (LIFO) is an inventory valuation method where goods purchased or produced most recently are assumed to be sold first. Under LIFO, ending inventory consists of oldest items at historical costs. LIFO generally results in lower profit during inflation as recent, higher costs are matched with revenues. Note: LIFO is not permitted under Indian Accounting Standards. In Tally, while LIFO option exists, businesses in India should use FIFO or Weighted Average.