Income Tax Assessment Act 1997



Division 70 - Trading stock  

Subdivision 70-C - Accounting for trading stock you hold at the start or end of the income year  

General rules

SECTION 70-45   Value of trading stock at end of income year  

You must elect to value each item of *trading stock on hand at the end of an income year at:

(a) its *cost; or

(b) its market selling value; or

(c) its replacement value.


An item ' s market selling value at a particular time may not be the same as its market value.


In working out the *cost, market selling value or replacement value of an item of *trading stock (other than an item the *supply of which cannot be a *taxable supply) at the end of an income year, disregard an amount equal to the amount of the *input tax credit (if any) to which you would be entitled if:

(a) you had *acquired the item at that time; and

(b) the acquisition had been solely for a *creditable purpose; and


Some assets, such as shares, cannot be the subject of a taxable supply.


The rest of this Subdivision deals with cases where the normal operation of this section is modified, or where a different valuation method may or must be used. The table sets out other cases where that happens because of provisions outside this Subdivision.

Rules about the value of trading stock
Item For this situation: See:
1 (Repealed by No 23 of 2005)
2 In working out the attributable income of a non-resident trust estate, trading stock is taken to be valued at cost. Section 102AAY of the Income Tax Assessment Act 1936
3 In working out the attributable income of a controlled foreign corporation, the corporation must value at cost. Section 397 of the Income Tax Assessment Act 1936
4 Some anti-avoidance provisions reduce the amount that is taken to be the cost of an item of trading stock. Subsections 52A(7), 82KH(1N), 82KL(6) and 100A(6B) of the Income Tax Assessment Act 1936
5 The value of the item at the end of an income year may be the same as at the start of the year for a small business entity Subdivision 328-E of this Act
6 The hybrid mismatch rules disallow an amount of a deduction for an outgoing incurred in connection with acquiring an item of *trading stock Section 832-60 of this Act


Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.