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March 18, 2026The Accounting Review

LIFO vs FIFO Under Conditions of "Certainty".

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Authors

TGTrevor E. Gambling

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Overview

This article compares the effects of LIFO and FIFO on profit valuation, indicating conditions that may favor one method over the other.

Key Points

  • The primary aim is to compare the effects of LIFO and FIFO inventory valuation methods under certain conditions.
  • Comparison of LIFO and FIFO methods with a certainty model
  • Analyzing profits in relation to internal rate of return
  • Evaluating enterprise value versus individual asset value
  • Profits under FIFO and correct profits are both partially unavailable for distribution
  • LIFO provides certain advantages by ignoring the initial purchase of goods in inventory
  • Comparative analysis suggests varying suitability of each method based on circumstances

Cite This Study

Trevor E. Gambling (1968) studied this question.

synapsesocial.com/papers/69ba426d4e9516ffd37a2b65https://doi.org/10.2308/tar-4484603
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Comparative Analysis of FIFO and LIFO Methods in Cost Accounting: Implications for Inventory Valuation and Profitability2025
  2. 2THE MANAGERIAL USE OF DATA OBTAINABLE IN CONJUNCTION WITH LIFO.1956
  3. 3A Note on Estimating the Economic Impact of the LIFO Method of Inventory Valuation.1976
  4. 4The Effects of LIFO Inventory Costing on Resource Allocation: A Comment.1981
  5. 5SOME PROBLEMS OF LAST-IN-FIRST-OUT ACCOUNTING.1942