Question

Which cost flow assumption does the International Financial Reporting Standards (IFRS) currently prohibit?

Answer 1

The International Financial Reporting Standards (IFRS) prohibits the use of the LIFO cost flow assumption and requires the use of the FIFO cost flow assumption.

Step-by-step explanation:

The International Financial Reporting Standards (IFRS) currently prohibits the use of the Last In, First Out (LIFO) cost flow assumption. LIFO assumes that the most recent inventory purchases are the first to be sold. However, IFRS requires the use of the First In, First Out (FIFO) cost flow assumption, which assumes that the oldest inventory is sold first.