Articles on: Investment Glossary

First-In, First-Out (FIFO)

(1) A method used when calculating capital gains and losses from redemptions of mutual fund shares, or the sale of other corporate securities, in which the first shares purchased are assumed to be the first shares sold when calculating the amount of gain or loss. If no designation is made to the IRS by the investor, FIFO will be required.
(2) A method of inventory valuation that assumes the oldest inventory (first-in) is sold first (first-out) (vs. LIFO).

Updated on: 24/04/2023

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