© 2014 Shmoop University, Inc. All rights reserved.
 

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

FIFO

Definition:

FIFO = First in First Out. It is an accounting term which refers to the method of accounting for inventory. Let's say you live in a high inflation time and you have stocked yacht bolts (they last forever) in your warehouse. The bolts you made 10 years ago cost $2 each; the bolts you made last year cost $5. FIFO accounting would have you recognize the $2 bolts first until you had sold all of them out of your warehouse and then you'd start accounting for the cost as $5 each instead of $2.

Advertisement
back to top