How FIFO and LIFO Control Part Costs in Navigator

In Navigator, FIFO and LIFO are two inventory management methods applied in different scenarios to manage stock costs effectively:

FIFO (First-In, First-Out)

• Application: Used when selling stock.
• How It Works:
  • FIFO assumes the oldest items in inventory are sold first.
  • This means the cost of the earliest purchased items is expensed first.
  • Important Note: FIFO does not mean the oldest physical stock item is sold—only that the cost associated with it is recorded first.

LIFO (Last-In, First-Out)

• Application: Used when producing credit notes.
• How It Works:
  • LIFO assumes the most recently acquired items are the first to be removed from inventory.
  • This means the cost of the latest purchases is applied first when issuing a credit note.

Key Differences