Home For AAT student members AQ 2016 Foundation Certificate in accounting Elements of Costing
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FIFO + LIFO valuation of inventory balance

DannyT90DannyT90 Surrey AAT Student, AATQB Posts: 159
Can anyone help me understand abit better why when then FIFO Costing method is used that the inventory balance is valued at the most RECENT purchase cost?

Is this because what's left in stock is mostly the most recent purchased items?

Best Answer

Answers

  • DannyT90DannyT90 Surrey AAT Student, AATQB Posts: 159
    Yeah that's what I thought but I wanted a second opinion, thanks for that.

    What's IAS 2?
  • BertieBertie West Midlands Registered Posts: 376
    International accounting standard 2 -

    It stipulates how inventories should be accounted.

    From memory you'll start to see accounting standards in level 3.
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