Section EB 17 — Income Tax Act 2007: Costs: manufactured or produced stock of low-turnover traders

EB 17 Costs: manufactured or produced stock of low-turnover traders When this section applies (1) This section applies when a low-turnover trader— (a) has a business of manufacturing or producing trading stock; and (b) determines the value of their closing stock at cost. Costs to be included (2) In determining the value of their closing stock, the low-turnover trader must include the following costs of production: (a) direct and indirect material costs: (b) direct and indirect labour costs: (c) utilities costs: (d) costs of repairing and maintaining factory plant: (e) costs of rent of factory plant: (f) amounts of depreciation loss on factory plant: (g) costs additional to those described in paragraphs (a) to (f), if— (i) they are costs of production; and (ii) the low-turnover trader includes them in the financial statements for the income year. Apportionment of difference not required (3) If the low-turnover trader allocates costs by a budgeted method or a standard cost method, and if any difference arises between the estimated costs of production included in the financial statements of the business for the income year and the actual costs of production, the low-turnover trader is not required to apportion the difference between the cost of trading stock sold during the income year and the closing stock. Defined in this Act: amount , business , closing stock , cost , depreciation loss , financial statements , income year , low-turnover trader , , trading stock Compare: 2004 No 35 s EB 17