First Expired - First Out

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First Expired - First Out ( English for "first expired - first out" ), often abbreviated as FEFO , describes a storage process in which elements that expire first are outsourced first. It differs from the related FIFO principle in that it is not the time of storage or receipt of goods , but the best-before date or the expiry date that has priority over the sequencethe removal is decisive. The FEFO principle represents the state of the art. The main advantage over other storage methods is the minimization of risk.

Merchandise management

In the field of merchandise management are LIFO - and FIFO method most widely used. The FEFO principle is used when there are more extensive requirements, for example due to customer requirements or standards . This is primarily the case in the food industry and in the pharmaceutical industry .

In other branches of industry, for example in the metal industry , the simpler and less costly FIFO is often used instead of the FEFO principle. The reason for this is a better cost-benefit ratio: since, for example, steel is viewed less critically than food with regard to the aging process, FIFO is usually sufficient, FEFO is not absolutely necessary. In practice, however, plastic granulate is a borderline case. In a specific case, a material flow simulation can provide information as to whether FEFO use is worthwhile or not.

Application in accounting according to HGB and tax law

The FEFO method is not permitted for the trade balance inventory valuation by means of a consumption sequential fiction. In § 256 HGB , the HGB finally names the FIFO and LIFO procedures as permitted consumption consequential fictions. ( Section 256 sentence 1 HGB ). In terms of tax law, only the LIFO principle may be applied ( Section 6 (1) No. 2a EStG ). In terms of accounting law, it is mostly recognized that the actual process in storage does not have to correspond to the valuation process. For this reason, the LIFO or FIFO procedure can be assumed in the trade balance sheet for valuation purposes, even if the actual warehousing works according to the FEFO procedure. However, if the valuation procedure deviating from the actual procedure is intended to bring about lower valuations and does not contribute to simplification, there may be a violation of the principles of proper accounting .

See also

Web links

Individual evidence

  1. ↑ Material flow accounting and simulation. Study letter from SRH Hamm, Prof. Dr. Markus Fittinghoff, 2010
  2. ↑ Ellrot in Beck'scher Balance Sheet Commentary, 7th edition, § 256 Rn 28