next-in-first-out cost

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A method of valuing units of raw material or finished goods issued from stock by using the next unit price at which a consignment will be received for pricing the issues. It is effectively using replacement cost as a stock valuation method, which is not normally acceptable as a stock valuation system in the UK when computing profits for taxation purposes. Compare first-in-first-out cost; last-in-first-out cost.

Subjects: Accounting.

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