What is FIFO?
FIFO is a stock valuation method that assumes the oldest units are sold first, so cost of goods sold is based on the earliest purchase prices and remaining stock is valued at the most recent ones.
FIFO is a stock valuation method that assumes the oldest units are sold first, so cost of goods sold is based on the earliest purchase prices and remaining stock is valued at the most recent ones.
In Bangladesh
With import prices and the exchange rate moving, the valuation method you choose changes reported margin noticeably. FIFO is the common choice where stock physically rotates, such as food and pharmacy.
An example
A trader buys 100 units at BDT 90 in January and 100 at BDT 110 in March, then sells 120. Under FIFO the cost of those 120 is 100 at BDT 90 and 20 at BDT 110, and the 80 remaining are valued at BDT 110.
In SORS ERP
SORS ERP supports FIFO, LIFO and weighted average valuation, with a comparison view and by warehouse reports so you can see what the choice is doing to your numbers.
Also called
- In Bangla
- ফিফো
- Also
- First in first out
Questions
Answered plainly, including where the answer is no.
Which valuation method is best?
There is no single answer, and consistency matters more than the choice. FIFO suits goods that physically rotate, weighted average suits repeated purchases of the same item at varying prices, and your accountant should agree the method before you start.
See SORS ERP running on your own numbers
A 30-minute demo in Bangla or English, with your products, your VAT setup and your questions.