Which inventory valuation method is not allowed under IFRS?

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Question: Which inventory valuation method is not allowed under IFRS?

Options:

Correct Answer: LIFO

Solution:

LIFO is not allowed under IFRS; companies must use either FIFO or Weighted Average.

Which inventory valuation method is not allowed under IFRS?

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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