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FIFo if you want to show higher net income and higher taxes. FiFO is allowed Under IFRS
LIFO if you want to show lower income and lower taxes to pay. LIFO is not allowed under IFRS, so it is only used in the US.
both are ok to use with respect to goods type
FIFO : In this method inventory is valued as per current price and would give a much accurate figure than the LIFO method.
As per AS-2 valuation of inventory, stock should be valued at cost or net realizable value whichever is lower. Further as per AS-2 FIFO and weighted average method for inventory valuation are recommended & exclusively permissible ruling out the LIFO method because of following reasons
It does not give a fair value of stock which is comparable to market value.
The inflated price or deflation in price is not reflected in LIFO method
The stock valued on LIFO basis is unrealistic & do not give a correct position of stock.
As against FIFO & weighted average the stock is valued on basis of old stock rates which were purchased earlier in the business though actual stock lying would be from the current inventory procured.
therefore due to following reasons LIFO method is mostly not suggested for inventory valuation
