Income and deductions for small business

Trading stock

Trading stock is anything you produce, manufacture, acquire or purchase for manufacture, sell or exchange for your business, including livestock.

For more information about the definition of trading stock, refer to Taxation Ruling No. IT 2670 Income tax: meaning of 'trading stock on hand'.

If the value of your stock varies by more than $5,000 between the beginning and the end of the income year, you must:

• value each item of trading stock on hand at the end of the income year
• account for the change in value in your assessable income - see Valuing trading stock.

If the value of your trading stock varies by $5,000 or less, you do not have to account for this difference. This is because the value of the trading stock you have on hand at the end of the year is deemed to be the same as at the start of the year. See Concession - simpler trading stock rules.

Sections within Trading stock

• Valuing trading stock
• Accounting for changes in the value of trading stock
• Concession - simpler trading stock rules
• Using stock for private purposes