A company utilizes the FIFO method for inventory and provides a number for the FIFO effect each reporting period. However, I noticed that the sum of the provided FIFO effect for Q1 and the provided FIFO effect for Q2 is not equal to the provided FIFO effect for H1. What would result in this?

Question

A company utilizes the FIFO method for inventory and provides a number for the FIFO effect each reporting period.  However, I noticed that the sum of the provided FIFO effect for Q1 and the provided FIFO effect for Q2 is not equal to the provided FIFO effect for H1.  What would result in this?

gw2011 · Answer

Using FIFO means that the inventory is made up of the most current items purchased by the company.  Therefore, there could be items purchased during these periods which will affect the inventory.