VALUATION OF STOCK

This query is : Resolved

devang doshi (Querist)
Follow

11 March 2010 ONE YEAR MARKET VALUE OF STOCK IS RS. 8 & COST IS RS. 10. SO WE VALUE THE CLOSING STOCK IN FINAL ACCOUNT IS RS. 8.

NOW IN SECOND YEAR THE SAME STOCK IS PENDING. & THE MARKET VALUE OF THE SAME IS RS. 12.

CAN WE VALUE THE STOCK AT RS. 8
BECAUSE NOW AT SECOND YEAR THE VALUE OF RS. 8 IS BECOME OUR COST & VALUATION IS ON COST OR MARKET VALUE IS LOWER.

CA Robin Betala

CA Robin Betala (Expert)
Follow

11 March 2010 Hi devang

My answer on your query that you should value your stock in second year at Rs 10
as this is your cost of stock and the market value is Rs 12

Therefore youi should value it at rs 10

Message likes : 1 times

devang doshi

devang doshi (Querist)
Follow

12 March 2010 sir,

is income tax department allow me to value the stock at rs. 8.00 ?
is it mendatory to value the stock at rs. 10.00 only ?

as it is very hard to remember our main cost & also market price ?

in addition as when the market price of the stock is once go down, we can argue to IT dept. that it is not worthy to raise the price related to such stock ? as it is not so reliable to fetch rs. 10 in future.

Madhusudan Bohra

Madhusudan Bohra (Expert)
Follow

13 March 2010 Stock is valued at lower of cost or net realisable value.

As per IAS -2 Cost is defined as sum of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost in your case will remain Rs. 10

Since market value is Rs. 12, stock needs to be valued at Rs. 10

However, it can be argued that since the stock is more than one year old and it will not fetch Rs. 10 valuaton and hence Rs. 8 looks to be real value of the stock and hence it can be value at Rs. 8

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

DHANASHRI KARMARKAR

CA Aakarsh Jain

Michael & Co.

divakar podaturu

sachingurav

Subscribe Now

VALUATION OF STOCK

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA