Accounting for IGCSE & O level - Final Statements (Section 14 - No. 8)
Which of the following statements is true about inventory valuation methods?
The same method should be used consistently.
FIFO will result in higher inventory valuation in a period of rising prices.
LIFO is the only acceptable method under IFRS.
Inventory valuation methods don't affect profit or loss
Explication
Consistent use of a method is important for comparability. FIFO results in higher valuation during rising prices. Inventory valuation method does have an effect on profit or loss.