The Ocean

Impact of choice of inventory accounting techniques over organizations’ profitability:
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In real world, the prices for most of products usually rise over a time-period because of inflationary pressures.

FIFO (First In First out) and LIFO (Last In First Out) have been two common inventory accounting techniques. Most organizations have inventories which they account for using either of FIFO or LIFO principles.

It’s important to appreciate that how choice of a particular inventory accounting technique impacts the balance sheet or P&L statement or a cash flow statement. For a quick understanding you may like surfing through the web.

A link for quick access is:
http://www.investopedia.com/articles/02/060502.asp

Believe us that not many will have an idea about this small but powerful concept.

Inventory Valuation For Investors: FIFO And LIFO We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.