Valuation Of Stock

[Kangwa]

What are the advantages and disadvantages of FIFO,LIFO and AVCO?

[rich152]

All 3 methods are valid for accounting purposes. The things to remember are consistancy and comparability and which method will present the most realistic financial situation of the company. For example, you should consider the current method being used and whether changing to a different method will present a more accurate financial picture. Thier may be a reason for changing, such as a change in the stock management process or a significant loss of stock through an accident. I wouldn't say their are any specific advantages or disadvantages to any of the stock valuation methods, only the financial situation potrayed by using them differs depending on the method used.