GlossaryEN1 min readUpdated: Jun 26, 2026

Last In, First Out (LIFO) Inventory Management

Warehouse managers and accountants apply LIFO (Last In, First Out) when the most recently received stock is consumed or valued ahead of older inventory.

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Last updated: 26 June 2026Published: 19 June 2025

Source: https://www.investopedia.com/terms/l/lifo.asp

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Definition & Explanation

Warehouse managers and accountants apply LIFO (Last In, First Out) when the most recently received stock is consumed or valued ahead of older inventory. In physical storage, the method arises naturally with bulk materials such as gravel or coal, where retrieving items in strict arrival order is impractical. In cost accounting, LIFO increases reported material costs during periods of rising purchase prices, which lowers the carrying value of inventory on the balance sheet and can have tax implications. It should not be confused with FIFO (First In, First Out), which many jurisdictions require for perishable or hygiene-critical goods. LIFO is not permitted for inventory valuation under IFRS (International Financial Reporting Standards).

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Recommended format: Source: Freight Academy – Last In, First Out (LIFO) Inventory Management (https://www.freight-academy.com/en/glossary/last-in-first-out-lifo-inventory-management), accessed 2026-11-11
APA style: Freight Academy Editorial Team. (2025). Last In, First Out (LIFO) Inventory Management. Freight Academy. https://www.freight-academy.com/en/glossary/last-in-first-out-lifo-inventory-management
BibTeX: @misc{lastinfirst2025, title = {Last In, First Out (LIFO) Inventory Management}, author = {{Freight Academy Editorial Team}}, year = {2025}, url = {https://www.freight-academy.com/en/glossary/last-in-first-out-lifo-inventory-management}, note = {Freight Academy, accessed 2026-11-11} }

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Last In, First Out (LIFO) Inventory Management - Definition & Meaning | Logistics Glossary