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Income Tax Act 2007

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

EB 23: Valuing closing stock under $10,000

You could also call this:

“Simplified valuation method for small businesses with low-value stock”

If you have a business with a turnover of $1,300,000 or less in a year, and you think your closing stock at the end of that year is worth less than $10,000, you can use a simple method to value your stock. Instead of counting and valuing all your stock at the end of the year, you can just use the same value you had at the start of the year. This makes it easier for you to do your taxes if you have a small amount of stock.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514335.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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EB 22: Valuing closing stock consistently for low-turnover traders, or

“Small businesses must value leftover stock consistently each year for tax purposes”

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EB 24: Apportionment on disposal of business assets that include trading stock, or

“Law about dividing money from selling business items, including stock, has been removed”

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

EB 23Valuing closing stock under $10,000

  1. This section applies when a person, including a low-turnover trader,—

  2. has a turnover of $1,300,000 or less in an income year; and
    1. reasonably estimates that the value of their closing stock for the income year is less than $10,000.

      1. The person may use the opening value of their trading stock as the value of their closing stock for the income year.

      Compare
      Notes
      • Section EB 23 heading: amended, on , by section 5(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
      • Section EB 23(1)(b): amended, on , by section 5(2) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).