what inventory cost methods are acceptable under generally accepted accounting principles gaap 
u s gaap allows for last in first out lifo first in first out fifo or average cost method of inventory valuation on the other hand international financial reporting standards ifrs do not allow lifo because it does not typically represent the actual flow of inventory through a business 2the bottom lineaverage cost method is one of three inventory valuation methods it assigns a cost to inventory items based on the total cost of goods purchased or produced in a period divided by the total number of items purchased or produced 