Inventory Costing Methods GAAP, or “Generally Accepted Accounting Principles”, is a system that helps businesses track the cost of their inventory over time. The system evaluates the cost of an item as it moves from production through final sale. This costing system helps businesses accurately value their inventories and better measure their financial performance. The system also takes into account expenses such as overhead, taxes, and other costs related to keeping items in stock. With these methods, businesses can always ensure they are getting the most out of their inventory investments.