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Income Tax Act 2007

Timing and quantifying rules - Valuation of trading stock (including dealer’s livestock)

EB 10: Replacement price

You could also call this:

“How to value closing stock using the replacement price method”

You can choose to value your closing stock at its replacement price if you use this method in your financial statements. The replacement price is either the market value of the trading stock on the last day of the income year, or if there’s no market value, it’s the last price you paid during the income year to buy similar trading stock. Remember, the replacement price doesn’t include any GST you paid when buying the replacement stock. This method gives you a way to value your stock based on what it would cost to replace it now, rather than what you originally paid for it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514306.

Topics:

Money and consumer rights > Taxes

EB 9: Discounted selling price, or

“How to value closing stock using discounted selling price”

EB 11: Market selling value, or

“How to calculate the lowest possible value of your unsold goods”

Part E Timing and quantifying rules
Valuation of trading stock (including dealer’s livestock)

EB 10Replacement price

A person may determine the value of their closing stock at its replacement price if they use replacement price for their trading stock in their financial statements.
The replacement price—
is—
1. the market value of the trading stock on the last day of the income year; or
2. if there is no such market value, the last price that the person paid during the income year to acquire equivalent trading stock; and
does not include an amount of input tax for the supply of the replacement trading stock to the person.

Compare

2004 No 35 s EB 10