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What are the differences between FIFO, LIFO, and HIFO inventory costing methods and how do they impact a company's financial statements?

The main differences between FIFO, LIFO, and HIFO inventory costing methods lie in how they value inventory. FIFO (First-In-First-Out) assumes that the oldest inventory is sold first, LIFO (Last-In-First-Out) assumes that the newest inventory is sold first, and HIFO (Highest-In-First-Out) values inventory based on the highest cost items first. These methods can impact a company's financial statements by affecting the reported cost of goods sold, net income, and taxes paid.


Actual cost of goods higher than cogs?

There will probably be a discrepancy if the statements use LIFO or FIFO. For instance, if a company uses LIFO and the price of the input was cheaper at an earlier time, then the COGS might be lower than the price paid for inputs during that time period and vice versa.


When should one use LIFO versus FIFO in inventory management?

One should use LIFO (Last In, First Out) in inventory management when they want to minimize taxes and show lower profits on their financial statements. FIFO (First In, First Out) should be used when they want to reflect current costs and show higher profits.


What is the difference between GAAP costing and IFRS costing?

There are several costing items that has change in the adoption of IFRS, for in GAAP the stock valuation or material pricing adopted is LIFO and FIFO but in IFRS only FIFO is adopted etc


What are accounting and finance systems functional areas?

Accounting and Financial areas includes payroll adminstration, cash budgeting, cash flow management, tax, Budget preparation & verification, MIS, FIFO, LIFO, etc..........

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