LIFOsäännöt

LIFOsäännöt, an abbreviation for Last-In, First-Out säännöt, refers to a principle used in inventory management and accounting. It dictates that the most recently acquired inventory items are assumed to be the first ones sold. This means that the cost of goods sold is based on the prices of the most recent purchases, while the remaining inventory on hand is valued at the cost of the oldest purchases.

In accounting, the LIFO method can be advantageous during periods of rising prices, as it tends to report higher cost of goods sold and therefore lower net income. This can lead to a lower tax liability. However, it is not permitted under International Financial Reporting Standards (IFRS) and is only allowed under U.S. Generally Accepted Accounting Principles (GAAP) under specific circumstances.

The physical flow of goods does not necessarily need to follow the LIFO assumption. It is purely an accounting convention for valuing inventory and calculating cost of goods sold. The alternative to LIFO is FIFO (First-In, First-Out), where the oldest inventory is assumed to be sold first. The choice between LIFO and FIFO can significantly impact a company's financial statements and tax obligations, especially in volatile price environments.