If your business buys or sells stock a stocktake is usually required at the end of each income year. You may not have to do an annual stocktake for income tax purposes if your business turnover is less than $2 million and the difference between the value of your opening stock and a reasonable estimate of your closing stock is $5,000 or less. If your turnover is $2 million or more you will have to do a stocktake at the end of the income year.
Where you do a stocktake, your records should include:
- a list describing each article of stock on hand and its value
- who did the stocktake
- how and when it was done, and
- who valued the stock and the basis of the valuation.
When you start a business, you may be entitled to GST credits and an income tax deduction for any goods you already own and bring into your new business as trading stock. This means that you need records of the market value or cost of these goods at the time your business starts.
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