This system is used for tax calculations under tax regulations in force in Spain.
FIFO applied to the investment ecosystem
The investor should take into account that FIFO rules (First in, First out) apply to the calculation of capital gains from the sale of units in a fund, i.e. the first units that entered the portfolio are sold first.
FIFO in inflation periods
In inflation periods, i.e. when there is an economic imbalance caused by production and demand which encourages the prices of products and services to rise, and the price of money used to buy or use them to fall, the FIFO variable acts as a method which increases profits due to allocating a lower cost to the goods sold, which is positive when presenting results to shareholders, creditors, etc. but negative when paying taxes.