Specific Identification Method

1. Under the specific identification method, the cost of each item in inventory is uniquely identified to that item. The cost follows the physical flow of the item in and out of inventory to cost of goods sold. Specific identification is usually used for physically large or high-value items and allows for a greater opportunity for manipulation of income. See also FIFO method and weighted average method and moving average method and LIFO method. The inventory cost flow method in which the actual cost of the specific goods sold is recorded as cost of goods sold.