5 Top Tips to Value your Trading Stock to Save Tax

  1. Obsolete Stock – Obsolete trading stock with no/low value can be written off/down and a tax deduction claimed this year.
  2. Slow moving Stock – Slow moving stock can be written down to net realisable value. Less stock = Less tax.
  3. Replacement Value – Stock can be written down from cost to a lower replacement value; not a common adjustment but one that is more relevant these days with the stronger Australian dollar making imports cheaper.
  4. Realisable Value – Stock can be written down from cost to a lower realisable value. If what you can sell it for (net of selling costs) is less than what it cost you, then you can write the stockline down to the net realisable value.
  5. Line by line valuation – The choice of valuing stock at cost or either of the above 2 valuation methods can be applied to each and every line of your stocktake. It’s quite legal to look at each line on the stocksheet and value the stock at the lower of cost, replacement value and net realisable value.

If you want to know how to change your stock valuations
then give us a ring on (03) 9585 7555 and ask for Noel or Amanda
or contact us by email atnoel@mktax.com.au