Unformatted text preview: ock valuation methods - summary
Stock valuation method
Base stock cost
First in first out
Last in first out
Last purchase price
Lower of cost or market
Unit cost (specific
identification) Acceptability of tax purposes
Acceptable Not acceptable
21 Shares & Securities
Shares Shares and securities held as trading stock
can be valued at Cost, or at
Lower of cost or net realisable value.
Lower However a consistent basis must be adopted.
However consistent 22 Shares & Securities If the stock on hand is composed of
If Purchases made at varying time with possibly
rights issues/bonus issues, It will not be possible to identify the cost of
individual items of stock sold. Valuation of the unsold stock should be made on
Valuation Average cost or Lower of average cost & market value
Lower average depending on which of the 2 valid bases have been adopted.
depending 23 Valuation of Sec...
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- Spring '13
- Progressive Tax, Market Value