hintajärjestyksersistä

Hintajärjestyksersistä is a Finnish term that translates to "price sequencing" or "order of pricing" in English. It refers to the chronological order in which prices are recorded or applied to a product or service. This concept is particularly relevant in accounting, inventory management, and financial reporting where it is crucial to accurately track the cost of goods sold.

There are several common methods of hintajärjestys. One widely used method is FIFO, or First-In, First-Out. Under FIFO, it is assumed that the oldest inventory items are sold first. Therefore, the cost of goods sold is based on the prices of the earliest purchases, while the remaining inventory is valued at the prices of the most recent purchases.

Another method is LIFO, or Last-In, First-Out. In contrast to FIFO, LIFO assumes that the most recently acquired inventory items are sold first. This means the cost of goods sold is based on the prices of the latest purchases, and the remaining inventory is valued at the prices of the oldest purchases. LIFO is not permitted under International Financial Reporting Standards (IFRS) but is allowed under US Generally Accepted Accounting Principles (GAAP).

Weighted-average cost is a third method where the cost of goods sold and ending inventory are calculated using a weighted average cost of all inventory available for sale during the period. The average cost is determined by dividing the total cost of goods available for sale by the total number of units available for sale.

The choice of hintajärjestys method can significantly impact a company's reported profits and inventory valuation, especially during periods of fluctuating prices. Companies must choose a method and apply it consistently.