first in, first out

first in, first out
A method of recording inventory for the purpose of taxation of a stock of merchandise. Anno: 66 ALR2d 834. A rule applied in the valuation of inventory for purposes of federal taxation, that where goods are so intermingled that they cannot be identified with specific invoices, the goods in the inventory will be considered to be the goods most recently purchased or produced. The rule that, for income tax purposes, securities sold are charged off against the earliest purchase, in order to compute gain or loss, where the identity of the securities sold cannot be determined. See first money in, first money out.

Ballentine's law dictionary. . 1998.

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