European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals


Inventory Cost Flow Assumptions and Limitations of Lifo: A Case Study of a Manufacturing Firm in Albania (Published)

Valuing inventory at cost is crucial for understanding a firm’s expenses, gross profit, taxes, net income, and ending inventory during a specific accounting period. This study focuses on inventory cost flow assumptions under IFRS and U.S. GAAP standards. In the Albanian accounting system, Specific Identification (SI), First In, First Out (FIFO), and Weighted Average Cost (WAC) methods are accepted. Among these, FIFO and WAC are the most commonly used inventory cost flow assumptions. The study also examines the reasons for the ban on Last In, First Out (LIFO) cost flow assumption by IFRS and Albanian accounting standards. An empirical analysis using a case study of a manufacturing firm reveals that the WAC assumption is more favorable, as it results in lower cost of goods sold (COGS) and an ending inventory cost that closely aligns with current market prices.

Keywords: Fifo, Lifo, WAC, gross profit, inventory cost flow assumptions

An Analysis of Optimal Inventory Accounting Models – Pros and Cons (Published)

In this paper titled “An Analysis of Optimal Inventory Accounting Models – Pros and Cons” researchers endeavor an attempt by doing ardent work that in any kind of organization, inventory accounting plays significant role in overall supply chain management as well maintaining profitable relationship amongst producers, sellers (organizations) and primarily customers. After thorough study, researchers have found that for the efficient, smooth and profitable functioning of organizations, inventory accounting system should be able to fulfill the requirements between supply and demand of products available in stock. In this research paper researchers investigate different inventory accounting methods and explore their popularity amongst different inventory models and also make emphasis of analysis of different available methods. Researchers also make an attempt to explore valid reasons in each described inventory accounting method as per different objectives of organizations in detail.

Keywords: Fefo, Fifo, Hifo, Lifo, Nifo

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