LIFO

Accounting method used for stock identification and valuation. It assumes that stock used is that purchased most recently. Conversely the stock remaining is the oldest stock and, if the price of stock has increased, the stock with the lowest value. This gives an accurate reflection of a company's profit position but leaves the closing stock undervalued on the balance sheet. LIFO contrasts with FIFO. LIFO is not permitted in UK, France, and many other European countries. It is, however, used extensively in the USA.