1, inventory valuation method is a kind of enterprise accounting treatment method. The choice of inventory valuation method is an important content of formulating enterprise accounting policy. Choosing different inventory valuation methods will lead to different reported profits and inventory valuation, which will affect the tax burden and cash flow of enterprises.

2. China's Accounting Standards for Business Enterprises stipulates: "Enterprises can choose FIFO method, weighted average method, moving weighted average method and individual valuation method to determine their actual costs according to the actual situation."

3. According to Article 14 of the new inventory standard, it is clearly stipulated that "enterprises should adopt FIFO method, weighted average method or individual valuation method to determine the actual cost of issuing inventory."