Inventory Valuation Methods: FIFO, Average, Specific

By mise · Updated September 29, 2026

Quick answer: inventory valuation puts a cost on the stock you hold. The common methods are FIFO, weighted average and specific identification (LIFO is allowed under US GAAP but not IFRS). Always value at cost, never at retail price.

Valuation changes your balance sheet, COGS and profit. Picking the method is not a detail.

Method	COGS of 150 units sold	Value of 50 on hand
FIFO	$320	$120
Weighted average	$330	$110
LIFO	$340	$100

Purchases: 100 units at $2.00 and 100 at $2.40. Average = $2.20.

mise values each count at the latest purchase price and shows average cost from your invoices.

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Keep reading Beginning and ending inventory: formulas and examples FIFO Inventory Method: Restaurant Rules and Example Perpetual vs Periodic Inventory: Differences Food Cost vs COGS: Are They the Same? All guides

Frequently asked questions

Which valuation method is best?

FIFO for perishables; weighted average for many low-value items.

Can I value inventory at retail price?

Only under the retail method used by some large retailers; small businesses value at cost.

Can I switch methods?

Only with justification and disclosure.

How much does mise cost?

A 7-day free trial, then US$33 a month per location (£26 in the UK).