What is the most preferable Costing Method for stock??
Lifo, fifo, avg.cost, Monthly Avg.Cost, Std.Cost????
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Costing method for stock
Replies (10)
FIFO BASIS
FIFO is best method
yeah FIFO is best method
It depends on many factors. If prices are too fluctuating then the average price method is preferred. FIFO is widely used as it is more logical. If price movements are negligible standard price method is used.
FIFO is best method for costing.
FIFO is the best one
Now why FIFO method?
do you know?
Fair market Value or cost whichever is lowrr.
refer accounting standard 2.
do you know?
Fair market Value or cost whichever is lowrr.
refer accounting standard 2.
AS 2 is applicable for presentation & disclosures in financials. But these methods are useful for internal analysis like arriving at cost of your product etc
Ultimately how u disclose in balance sheet that is very essential.
But internal analysis is also very much essential and important to arrive at your cost & thereby to arrive at a selling price which makes sense. Financials are end results but to get there you need to have a plan which is based on these internal analyses and projections.
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