Finance
First-In-First-Out (FIFO)
First-In-First-Out (FIFO) is an inventory valuation method based on the assumption that the goods received first are also the first to be issued, consumed or sold. As a result, the value of an issue is determined using the oldest available receipt costs. FIFO is particularly relevant for warehouses with stock received at different times, because changes in purchase prices influence the valuation of stock movements and remaining inventory. In SAP Business One, this method affects the inventory value and therefore also reporting in warehouse management and accounting, so that when goods are issued a company can trace which historical acquisition cost was used to value the quantity withdrawn.
