LIFO (last in, first out)
Last in, first out assigns the latest inventory costs to items sold first. For interchangeable inventory under IAS 2, use FIFO or weighted average instead; specific identification applies to items that are not ordinarily interchangeable. A question asking for IFRS inventory valuation should not use LIFO even if a historical example describes it. An assumed cost flow need not match the physical order in which identical goods move.
Worked example
If purchases cost 10 then 12, the later 12 cost is assigned first under LIFO.
Common mistake
IAS 2 does not permit LIFO. It is retained only as a historical comparison, not an FA inventory formula.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Historical | July 2027–August 2028 |
| ACCA | FA | Historical | September 2026–June 2027 |
| ACCA | K1 | Historical | July 2027–August 2028 |
| ACCA | MA | Direct | September 2026–June 2027 |
| CIMA | BA3 | Historical | Official assessment-window verification pending |
| FIA | FFA | Historical | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |
Related terms
Also called: Last in, first out