Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 70.45

Value of trading stock at end of income year

  (1)   You must elect to value each item of * trading stock on hand at the end of an income year at:

  (a)   its * cost; or

  (b)   its market selling value; or

  (c)   its replacement value.

Note:   An item's market selling value at a particular time may not be the same as its market value.

  (1A)   In working out the * cost, market selling value or replacement value of an item of * trading stock (other than an item the * supply of which cannot be a * taxable supply) at the end of an income year, disregard an amount equal to the amount of the * input tax credit (if any) to which you would be entitled if:

  (a)   you had * acquired the item at that time; and

  (b)   the acquisition had been solely for a * creditable purpose; and

Note:   Some assets, such as shares, cannot be the subject of a taxable supply.

  (2)   The rest of this Subdivision deals with cases where the normal operation of this section is modified, or where a different valuation method may or must be used. The table sets out other cases where that happens because of provisions outside this Subdivision.

 

Rules about the value of trading stock

Item

For this situation:

See:

2

In working out the attributable income of a non - resident trust estate, trading stock is taken to be valued at cost.

Section   102AAY of the Income Tax Assessment Act 1936

3

In working out the attributable income of a controlled foreign corporation, the corporation must value at cost.

Section   397 of the Income Tax Assessment Act 1936

4

Some anti - avoidance provisions reduce the amount that is taken to be the cost of an item of trading stock.

Subsections   52A(7), 82KH(1N), 82KL(6) and 100A(6B) of the Income Tax Assessment Act 1936

5

The value of the item at the end of an income year may be the same as at the start of the year for a small business entity

Subdivision   328 - E of this Act

6

The hybrid mismatch rules disallow an amount of a deduction for an outgoing incurred in connection with acquiring an item of * trading stock

Section   832 - 60 of this Act



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