First in, First out (FIFO) is an inventory model in which the first acquired receipts are issued first. Issues from inventory are settled against the first receipts into inventory based on the physical date of the inventory transaction.

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

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

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