Base Stock Method

Base Stock Method

A way to account for the value of a company's inventory. All base stock (the minimum needed to maintain operations) is calculated according to its purchase price, while the LIFO method is used for all additional inventory. The base stock method is not a generally accepted system. See also: Generally Accepted Accounting Principles.
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Where the LIFO or base stock method is permitted in national tax regimes, the key limitations are that they be acceptable under company law (and perhaps be used in the commercial accounts) and, most important, that the method be used consistently from year to year.
11) We recommend that the task force reconsider permitting LIFO or base stock methods of accounting for inventory.
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