Section EB 9 — Income Tax Act 2007: Discounted selling price

EB 9 Discounted selling price Valuation at discounted selling price (1) A person may determine the value of their closing stock at its discounted selling price if they use discounted selling price for their trading stock in their financial statements. Retailers (2) If the person is a retailer, the discounted selling price for each department or category of goods is the total of the retail selling prices of the goods minus the normal gross profit margin for the department or category of goods. This subsection is overridden by subsection (4). Normal gross profit margin for purposes of subsection (2) (3) For the purposes of subsection (2), the person must— (a) calculate the normal gross profit margin for the department or category of goods under NZIAS 2 or an equivalent standard issued in its place; and (b) calculate the normal gross profit margin for each income year for each department or category of goods; and (c) include all costs that sections EB 6 to EB 8 require to be included. Retailers with turnover of $1,000,000 or less (4) A trader who is a retailer whose turnover is $1,000,000 or less may determine the discounted selling price of all closing stock valued under this method in an income year by discounting the total of the retail selling prices of the stock by the average gross profit margin for all closing stock valued under this method in the income year. Increase in specified sum (5) The Governor-General may make an Order in Council increasing the sum specified in subsection (4). Not retailers (6) If the person is not a retailer, the discounted selling price for each category of goods is the total market selling value of the goods minus the normal gross profit margin for the category of goods. Normal gross profit margin for purposes of subsection (6) (7) For the purposes of subsection (6), the person must— (a) calculate the normal gross profit margin for each income year for each category of goods; and (b) include all costs that sections EB 6 to EB 8 require to be included. Defined in this Act: closing stock , cost , financial statements , income year , NZIAS 2 , trading stock , turnover , Compare: 2004 No 35 s EB 9 Section EB 9(3)(a): amended, on 1 April 2008, by section 350(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EB 9 list of defined terms NZIAS 2 : inserted, on 1 April 2008, by section 350(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).