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  • General trading stock rules

    The general trading stock rules apply to you if the value of your trading stock changes by:

    • more than $5,000
    • $5,000 or less but you choose to do a stocktake and account for the change in value.

    You can choose to do a stocktake and use the general trading stock rules even if you are eligible to use the simplified trading stock rules.

    Under the general trading stock rules, you must do an end-of-year stocktake and record the value of all trading stock you have on hand at both:

    • the beginning of the income year
    • the end of the income year.

    The value of stock at the end of an income year is usually the same as its value at the start of the next income year, however if, for some reason, the value of closing stock is:

    • more than that of opening stock, you must include the difference as part of your assessable income
    • less than that of opening stock, you can reduce your assessable income by the difference.

    An increase in your trading stock's value over the year is assessable income, while a decrease is an allowable deduction.

    Where a business starts trading during an income year, the total value of stock on hand at the end of that year is included in your assessable income.

    Last modified: 03 Apr 2017QC 51614