Which method of inventory costing is prohibited under IFRS?
A) Average-cost.
B) FIFO.
C) LIFO.
D) Specific identification.

Question

Quizplus · Accepted Answer

LIFO, or Last-In-First-Out, is prohibited under IFRS. This method assumes that the most recently purchased inventory items are sold first, which can result in distorted financial statements during times of inflation. Instead, IFRS requires the use of either the FIFO or weighted average cost methods. Specific identification is also allowed but is only practical for businesses with unique or high-value items.

Which Method of Inventory Costing Is Prohibited Under IFRS