This sampling rule does not apply to expenditure on:

  • establishing a business or business venture or building a significant store or stockpile of assets
  • assets held by you under a lease, hire purchase or similar arrangement
  • assets acquired by you for lease or hire to (or that will otherwise be used by) another entity
  • assets included in an asset register you maintain in a manner consistent with reporting requirements under accepted Australian accounting standards
  • any asset that forms part of a collection of assets that is dealt with commercially as a collection (for example, by being sold and leased-back as a means of raising finance for the business)
  • trading stock or spare parts.

This rule does not apply separately to expenditure on assets that are part of another composite asset. In this case, you must test expenditure on the composite asset. Items would not normally be a separate asset where they are not functional on their own (for example, scaffolding clamps).

You cannot use statistical sampling if your current systems result in reliable individual identification and accounting of low cost items.

Your statistical methods must be consistent with the ATO's Audit statistical sampling guidelines. These guidelines aim to ensure that the sample is representative of the total population. However, statistical sampling outlined in this fact sheet can be used to compile your tax return regardless of anything in those guidelines.

The sampling results must be statistically valid and result in objective, reliable and conservative estimates.

Statistical sampling will be acceptable if:

  • all relevant records and working papers relating to the sampling are available to the ATO for examination
  • an adequate statistical sampling design has been used
  • the sample is representative of the population from which it has been drawn
  • the data obtained from the sample is correct
  • the estimates have been calculated correctly.
    Last modified: 24 Feb 2012QC 17147