Is LIFO allowed in Romania?

Not for financial reporting under OMFP. The accepted methods are FIFO and weighted average cost (WAC). LIFO appears more in other jurisdictions (e.g. certain US tax rules).

Which is better, FIFO or WAC?

It depends. FIFO reflects physical flow well for perishables and gives realistic issue costs. WAC is simpler to manage and smooths price swings. Both are legal in Romania.

What is FEFO and how does it relate to FIFO?

FEFO (First Expired, First Out) draws the batch expiring first, not necessarily the oldest received. It's essential for products with expiry dates and is managed in the WMS.

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Inventory valuation methods (FIFO, LIFO, WAC)…

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Category: Logistică · Acronym: FIFO/LIFO/CMP

Inventory valuation methods (FIFO, LIFO, WAC)

Quick answer: Accounting rules to determine the cost of goods leaving stock: first-in-first-out, last-in-first-out, or weighted average cost.

Key takeaways

FIFO (First In, First Out) — oldest batches are drawn first. In inflation → lower cost on issues, higher profit. Ideal for perishables.
LIFO (Last In, First Out) — newest batches drawn first. NOT allowed by Romanian accounting regulations (OMFP) for financial reporting.
WAC (Weighted Average Cost) — issue cost = weighted average of stock. Smooths price swings; widely used in Romania.

Why the valuation method matters

When you buy the same product at different prices over time, you need a rule setting at what cost goods leave stock on sale. The chosen method directly affects cost of goods sold (607), hence profit and tax.

The three methods

FIFO (First In, First Out) — oldest batches are drawn first. In inflation → lower cost on issues, higher profit. Ideal for perishables.

LIFO (Last In, First Out) — newest batches drawn first. NOT allowed by Romanian accounting regulations (OMFP) for financial reporting.

WAC (Weighted Average Cost) — issue cost = weighted average of stock. Smooths price swings; widely used in Romania.

Fiscal and reporting impact

In inflation, FIFO gives higher accounting profit (hence higher tax), WAC smooths it. The method must be applied consistently and declared in accounting policies.

Batch traceability

Correct FIFO requires tracking batches and receipt dates — impossible without a WMS. For products with expiry, FIFO/FEFO (First Expired, First Out) is operationally mandatory.

How Azuvio helps

Azuvio keeps batch records in the WMS (receipt date, expiry, entry cost) and transmits the correct issue cost to the accounting tool, so the declared method (FIFO or WAC) is applied automatically, without manual calculation.

Frequently asked

Is LIFO allowed in Romania?: Not for financial reporting under OMFP. The accepted methods are FIFO and weighted average cost (WAC). LIFO appears more in other jurisdictions (e.g. certain US tax rules).
Which is better, FIFO or WAC?: It depends. FIFO reflects physical flow well for perishables and gives realistic issue costs. WAC is simpler to manage and smooths price swings. Both are legal in Romania.
What is FEFO and how does it relate to FIFO?: FEFO (First Expired, First Out) draws the batch expiring first, not necessarily the oldest received. It's essential for products with expiry dates and is managed in the WMS.

Where Azuvio fits

Related terms

Safety stock — Extra buffer inventory held to prevent stockouts caused by demand or supply variability.
NIR / Goods Receipt Note (GRN) — Internal document confirming the physical receipt of goods in the warehouse — the pivot between supplier delivery note and invoice.
WMS (Warehouse Management System) — The system orchestrating physical warehouse operations: receiving, putaway, picking, packing, shipping.
SKU (Stock Keeping Unit) — Internal unique code of an item in your stock — finer granularity than GTIN.

Last updated: 2026-07-06