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LIFO

   Also found in: Dictionary/thesaurus, Legal, Acronyms, Encyclopedia, Wikipedia, Hutchinson 0.01 sec.
LIFO

LIFO

Last In, First Out
In accounting, a technique for valuing inventory by treating inventory acquired most recently as if it were sold first. The sale of inventory is recorded against the purchase price of the most recently acquired inventory, even if the physical goods are not the same. In times of high inflation, the last-in, first out technique reduces a business' inflation risk. It also may reduce one's tax liability. For these reasons, most American firms have used this technique in their accounting since the 1970s.

Last In, First Out (LIFO)
An accounting method for valuing inventories for tax purposes. Under this method, the last items purchased are treated as being the first items sold. Ending inventory is valued using the cost of the items with the earlier purchase dates.


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In this consolidated case, the taxpayers owned a group of four S corporations that had used the link-chain, dollar-value method of valuing LIFO inventory for at least 10 previous tax years.
Boyle submitted the following letter to Senators Charles Grassley and Max Baucus, Chair and Ranking Member of the Senate Finance Committee, respectively, urging retention of the LIFO method of accounting.
The 2006 fiscal year financial results include in cost of sales a pre-tax LIFO expense amount of $94.
 
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