Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) You can choose not to account for changes in the * value of your * trading stock for an income year if:
(a) you are a * small business entity, or an entity covered by subsection (2), for that year; and
(b) the difference between the value of all your trading stock on hand at the start of that year and the value you reasonably estimate of all your trading stock on hand at the end of that year is not more than $5,000.
Note 1: As a result, sections 70 - 35 and 70 - 45 (about comparing the value of each item of trading stock on hand at the start and end of an income year) will not apply to you for the income year.
Note 2: When making a reasonable estimate of the value of trading stock on hand:
(a) special valuation rules may be used, for example, obsolete stock, natural increase of live stock, horse breeding stock; and
(b) the estimated value disregards an amount equal to the amount of input tax credits (if any) to which you would be entitled for an item if the acquisition of the item had been solely for a creditable purpose: see subsection 70 - 45(1A).
Note 3: If you choose to account for changes in the value of your trading stock for an income year, you will have to do a stocktake and account for the change in the value of all your trading stock: see Subdivision 70 - C.
(2) An entity is covered by this subsection for an income year if:
(a) the entity is not a * small business entity for the income year; and
(b) the entity would be a small business entity for the income year if:
(i) each reference in Subdivision 328 - C (about what is a small business entity) to $10 million were instead a reference to $50 million; and
(ii) the reference in paragraph 328 - 110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection.