Accounting Why do we need alternative inventory methods? Would we need them if prices never changed?

Answer 1

Prices do change otherwise you are right we don't need them.

Answer 2

We need alternative inventoy method because a single inventory method may, at some other companies, not be applicable. Example, at some retail grocery stores, making a detailed records at all the items sold and unsold is too time consuming especially if the item involves is low value, fast moving items. Using FIFO in this company may be too time consuming and inefficient, hence, it the costs will exceeds it benefits. There is an established accounting principle that benefits should always exceeds its cost.

If prices never changed then we don't need alternative inventory methods anymore but this scenario is impossible nowadays. We are continually experiencing inflation and prices move up and down in the market. But if in case you're assumption should be true, alternative inventory method is not anymore necessary.