Commonwealth Consolidated Acts Commonwealth Consolidated Acts(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 |