Last In, First Out (LIFO) is an inventory model in which the last (newest) receipts are issued first. Issues from inventory are settled against the last receipts into inventory based on the date of the inventory transaction. Several issues are settled in the order of last Issue, last receipt.

When using LIFO, you can choose to mark inventory transactions so that a specific item receipt is settled against a specific issue instead of using the LIFO rule.

We recommend a periodic inventory closing when you use the LIFO inventory model.

For more information including examples of the LIFO inventory model, see About LIFO.