Inventory Valuation Methods – FIFO, LIFO for Shop Owners

How do you value the stock sitting in your shop? FIFO and LIFO are the main methods.

FIFO (First In, First Out)

Assume you sell the oldest stock first. Matches reality for perishables—milk, bread, biscuits. Old stock goes first.

Best for: Kirana stores, FMCG, items with expiry dates.

LIFO (Last In, First Out)

Assume you sell the newest stock first. Rarely used in India for tax purposes.

Best for: Some accounting scenarios; less common for retail.

For Indian Shops

FIFO is the norm. It reflects how you actually sell—old stock first. It’s also required for certain items under Indian accounting standards.

An inventory app can track cost and apply FIFO automatically. [Join the waitlist](/ “#waitlist) for Stockkeeper.