Last In First Out (LIFO) Definition
An acronym for last in first out. As applied to the thrift industry, it is an accounting method to determine interest earned on savings accounts whereby any withdrawals are deemed to be taken from the most recent deposits. As applied to business in general, LIFO refers to a method of establishing the value of inventories whereby the price of the last incoming shipment of a particular item is used to place an inventory value on all shipments of the item in a given period. Also see FIFO.