Income Tax Assessment Act 1997
[ CCH Note: Subdiv 328-E heading will be amended by No 92 of 2020, s 3 and Sch 3 item 30, by substituting " small and medium business entities " for " small business entities " , effective 1 January 2021 and applicable in relation to income years starting on or after 1 July 2021.]
If you make a choice under section 328-285 for an income year, the * value of all your * trading stock on hand at the start of the income year is:
(a) the same amount as was taken into account under this Act at the end of the previous income year; or
(b) zero if no item of trading stock was taken into account under this Act at the end of the previous income year.
The amount taken into account at the end of the previous income year is worked out under either section 70-45 or subsection (2) of this section.
If you make a choice under section 328-285 for an income year, this Act applies to you as if the * value of all your * trading stock on hand at the end of the year were equal to the value of all your trading stock on hand at the start of the year.
Angela operates a riding school, and also sells riding gear. Her business is a small business entity for the 2008-09 income year and makes a choice under section 328-285 for that year.
At the start of the 2008-09 income year, the opening value of Angela ' s trading stock is $30,000. Using her reliable inventory system, she estimates the closing value to be $34,000.
The closing value for the 2008-09 income year, and the opening value for the 2009-10 income year, will be $30,000.