Summary:As a group we decided to do our project on the fundamental differences between last-in, first out (LIFO) and first-in, first out (FIFO) under the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). LIFO vs. FIFO according to GAAP and IFRS are an essential part of accounting. We tend to know more about GAAP than IFRS because with accounting we are trained to be GAAP compliant. Even though we should be compliant with GAAP, that doesn't mean they are necessarily better than IFRS. Or does it? All in all we believe that this topic is an important aspect of accounting and that we should know more about the difference in depth between the two. Introduction: There are three forms of inventory costing methods that we tend to use LIFO, FIFO and weighted average costing. “The average cost method values ​​items in inventory based on the average cost of all similar goods available during the period” (Kiso, Weygandt, Warfield 429). The two most common methods used that we will talk about are LIFO and FIFO. As the name suggests, LIFO stands for last-in, first out, which implies that the last product released to the market is the first to be sold/purchased. FIFO means first-in, first-out is the opposite of LIFO, the first item entered is typically the first item to be sold. These two accounting methods tend to differ in GAAP, which is rules-based, and IFRS, which is considered principles-based. Differences between GAAP and IFRS The main difference between USGAAP and IFRS is that GAAP is rules-based while on the other hand IFRS is considered to be principles-based. What they mean by this is simple. Under GAAP, the LIFO (half-sheet-of-paper, first-out) method is used when preparing a company's financial statements. Conclusion “While LIFO offers significant advantages over FIFO from a tax reporting perspective, states are considering banning the use of LIFO.” Most businesses in the United States use the FIFO method, but they can also choose to use LIFO under USGAAP. IFRS has completely abandoned the use of the LIFO method “Many companies believe that repealing LIFO would result in a dramatic increase in taxes for both large and small businesses.” Now they are focusing on merging the two accounting standards to reduce the differences between the two GAAP and IFRS one set of standards for the whole world, it will be easier to manage and understand them companies from different countries (FIFO vs. LIFO: what is the difference?)