Inventory valuation
To meet the various reporting principles, organizations must be able to value inventory according to various cost or pricing rules and multiple coexistent valuation bases. Some examples are LIFO, FIFO, Average, Historical Average, Net Sales Value, Obsolescence, Actual, WIP, Standard, Usage, Periodic, Perpetual, Serial/Lot.
The various inventory valuation methods can affect the valuation of direct materials, labor, and overheads.
Chile specifics
In Chile, the costing of goods sold or manufactured goods and supplies consumed is based on the first-in, first-out (FIFO) basis, or the weighted-average-cost method.
When the taxpayer has selected one of the methods, it must be used for at least 5 years.