Impact of Inventory Valuation Methods

We discussed the impact of LIFO and FIFO valuation methods on COGS, ending inventory, and gross profits under the increasing prices scenario under inflationary and deflationary scenarios. The following table summarizes the impact of LIFO and FIFO under the inflationary scenario (rising prices).

	FIFO	LIFO
COGS	Lower	Higher
Ending Inventory	Higher	Lower
Gross Profits	Higher	Lower