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Which inventory valuation method is not allowed under IFRS?

Practice Questions

Q1
Which inventory valuation method is not allowed under IFRS?
  1. FIFO
  2. LIFO
  3. Weighted Average
  4. Specific Identification

Questions & Step-by-Step Solutions

Which inventory valuation method is not allowed under IFRS?
  • Step 1: Understand what IFRS stands for. It means International Financial Reporting Standards.
  • Step 2: Learn about inventory valuation methods. These are ways companies value their inventory.
  • Step 3: Identify the common inventory valuation methods: FIFO (First In, First Out), LIFO (Last In, First Out), and Weighted Average.
  • Step 4: Know that LIFO is one of the methods used to value inventory.
  • Step 5: Check the rules under IFRS. IFRS does not allow the use of LIFO for inventory valuation.
  • Step 6: Conclude that companies must use either FIFO or Weighted Average instead of LIFO under IFRS.
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