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.

Quick Answer

Last updated: 26 June 2026Published: 19 June 2025

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

Category

Logistics Concept

Reading time

1 min

Words

111

Mentioned in

–

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).

Next steps

Tools that match this term

Calculate customs valueWork out import duties and customs valueOpen Find HS codeDetermine the tariff number for customsOpen Compare IncotermsClarify duties, cost and riskOpen Calculate transit timeEstimate duration per transport modeOpen

Related Terms

You might also be interested in these terms

LIFO (Last in, First out)

A warehouse operative picks the newest pallet from a block stack while older stock sits behind it – that is LIFO (Last In, First O…

Learn more

LIFO (Last In, First Out)

LIFO (Last-In, First-Out) differs fundamentally from FIFO in that it assumes the most recently received goods are the first to be …

Learn more

Last Container Rule in Maritime Shipping

Unlike a binding procedural rule, the Last Container Rule is a stowage optimisation principle in container shipping: a container l…

Learn more