First In, First Out
| First In, First Out (FIFO) is an asset management method in which the assets acquired first are sold first. This method is used to simplify tax calculations. When using the FIFO method, the cost of the assets sold is determined by the cost of the assets acquired first. The cost of the assets acquired later is not considered. This method is used because it is easy to track and calculate. The FIFO method is not required by law, but it is the most commonly used method for tax purposes. This method is used because it generally results in the lowest tax liability. If you use the FIFO method, you must keep track of the order in which the assets were acquired. This can be done by keeping records of the date of purchase, the cost of the asset, and the serial number of the asset. The FIFO method is the simplest and most common method of asset management. It is easy to track and calculate, and it generally results in the lowest tax liability. |
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