last in, first out ( LIFO)
One of the methods for accounting for business inventory permitted by generally accepted accounting principals ( GAAP). American Banker Glossary
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( LIFO)
An accounting method that fixes the cost of goods sold to the most recent purchases. Hence, if prices are generally rising, LIFO will lead to lower accounting profitability. Bloomberg Financial Dictionary
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1. ACCOUNTING a method of calculating the value of goods or materials held in stock, based on the principle that those put in stock last are the first ones sold or used. Any stock that is left at the end of the year is valued at the cost of the first goods bought:
2. HUMAN RESOURCES a system used by companies who are reducing the number of people working for them, in which the people who joined the company most recently lose their jobs first:
• The company were firing people on the last in, first out basis.
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last in, first out UK US noun [U] (ABBREVIATION LIFO)
► ACCOUNTING a method used to calculate the value of products or materials, in which the last ones that are bought are considered to be the first that are sold or used. At the end of the year, the value of the ones that have not been sold or used is calculated using the earliest price that was paid: »
In times of inflation, many companies switch to a ""last in, first out"" accounting method, in order to avoid paying tax on profits that appear higher.
► PRODUCTION a method of controlling stock, in which the last products or materials that are produced or bought are the first that are sold or used
► IT the system by which a computer reads and deals first with data that is received last
► HR the situation in which, when a company needs to reduce the number of employees, the last people who were employed are the first to lose their jobs: »
The last-in, first-out redundancy policy used to be straightforward to apply but the recent age discrimination legislation has made the matter more complex.
Financial and business terms. 2012.