Section EB 6 — Income Tax Act 2007: Cost

EB 6 Cost Valuation at cost (1) A person may determine the value of their closing stock at cost. If the person chooses this method, they must include and allocate costs under generally accepted accounting practice or as described in subsection (1B)(b). Valuation at cost: agricultural produce (1B) Despite subsection (1), a person who uses NZIAS 41 for their trading stock in their financial statements must— (a) value their closing stock at cost; and (b) include and allocate costs so that the value of their closing stock is not materially different from the value of the closing stock obtained by applying NZIAS 2, ignoring paragraph 20 of NZIAS 2. Whether valuation correct (2) For the purposes of subsection (1), the person has not complied with generally accepted accounting practice if the value of closing stock is materially different from the value obtained by applying, to the closing stock, NZIAS 2 or an equivalent standard issued in its place. Definition (3) In this section, NZIAS 41 means New Zealand Equivalent to International Accounting Standard 41, approved or issued under the Financial Reporting Act 1993 as amended from time to time, or an equivalent standard issued in its place. Defined in this Act: closing stock , cost , generally accepted accounting practice , NZIAS 2 , NZIAS 41 Compare: 2004 No 35 s EB 6 Section EB 6(1): amended, on 1 April 2008, by section 349(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(1B) heading: inserted, on 1 April 2008, by section 349(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(1B): inserted, on 1 April 2008, by section 349(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(2): amended, on 1 April 2008, by section 349(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(3) heading: inserted, on 1 April 2008, by section 349(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(3): inserted, on 1 April 2008, by section 349(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6(3): amended, on 1 July 2011, by section 12 of the Financial Reporting Amendment Act 2011 (2011 No 22). Section EB 6 list of defined terms NZIAS 2 : inserted, on 1 April 2008, by section 349(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 6 list of defined terms NZIAS 41 : inserted, on 1 April 2008, by section 349(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).