There are many valuation methods that can be used to determine the dollar value of ending inventory. The inventory valuation method you choose to use for your parts department will impact financial statements so it is important to consider your department's goals. You also need to consider GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards) restrictions.
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For most businesses, the flow of materials is first in first out, meaning that the oldest items are taken off the shelf first allowing newer, fresher stock to be left on the shelves. In some industries, such as those selling food and beverage products, this flow is made necessary through expiry dates.