Definitions for "Last-In, First-Out"
(1) An inventory valuation method that assumes the newest inventory (last-in) is sold first (first-out) (vs. FIFO). (2) The method of determining the taxable portion of a random withdrawal from an annuity. Taxable earnings are treated as being withdrawn before the tax-free return of contributions.
The valuation principle assuming that the stock of a certain product received last is sold or consumed first. By this method the stock can be valued at (normally lower) prices from the past, whereas the material consumption is valued at (normally higher) relatively up-to-date prices.
Characteristic of a queue in which the last item put into the queue becomes the first item to be taken out of it