Same purchases, same sales — three different inventory cost methods, three different income statements. This calculator runs your scenario through all three so you can see exactly how COGS, ending inventory, and gross profit diverge. Useful for explaining method choice to a CFO, or for sanity-checking a switch you're considering.
You provide a simple sequence of purchases and sales. The calculator computes, for each of three methods:
LIFO is permitted under US GAAP but not under IFRS. If your books are audited under IFRS, you have only FIFO and weighted-average to choose from (with some disclosure flexibility). Switching methods has a real effect on taxable income in the US. We're not your accountant — see the disclaimer.
In an environment where input prices are rising, FIFO reports the highest profit (because older, cheaper costs are in COGS, and ending inventory holds newer, more expensive units). LIFO reports the lowest profit and the lowest ending inventory. Weighted average sits between.
This isn't free money — tax follows reported profit. FIFO means higher taxes now, but your balance sheet shows current-cost inventory. LIFO means lower taxes now, but your balance sheet shows outdated costs.