A stocktake can be an important part of running a business. But does your business need to do a stocktake this financial year? If you buy or sell stock, recent law changes could affect whether you need to do one this income year.
From July 1, 2016, a business will only need to do a stocktake for tax purposes at the end of an income year if either:
These changes might mean that you are not required to do a stocktake for tax purposes. But it may be beneficial for business reasons, and can help with a number of business processes such as pricing strategies, ordering processes and identifying missing stock.
If a stocktake is required, this should be done as close to the end of the financial year as practical. The following records are generally required:
When a business starts, it may be entitled to GST credits and an income tax deduction for any goods already owned and brought into the new business as trading stock. This means records will be needed of the market value or cost of these goods from the time the business starts.
Electing to do a stocktake
Note that a business may choose to do a stocktake and include the change in value in assessable income, even if that change is $5,000 or less. You might make this choice if you prefer to:
Where you choose to account for the change in value, the general trading stock rules apply.