How to Calculate an Inventory Balance Using FIFO. Since the price of products continually changes due to inflation and consumer demand, valuing current inventory can be challenging.

Calculate the value of the inventory sold during the period. Using FIFO, list the beginning inventory and the first shipments of inventory as being sold first.

Which inventory method generally results in costs allocated to ending inventory that will approximate their current replacement cost? In an inflationary period, FIFO will approximate current costs in ...

FIFO means "First In, First Out" and is a valuation method in which the assets produced or acquired first are sold, used, or disposed of first.

FIFO shows attractive returns to investors whereas LIFO reduces taxes due to the specific calculations of each method. A company's LIFO reserve = (FIFO inventory) - (LIFO inventory).

As it turns out, the new accounting method produced an inventory value very near what would have been reported had Home Depot Canada stuck with the old FIFO method.