Your clients agribusinesses are getting more complex every year especially in relation to trading stock. Many hold trading stock over multiple periods and often apply it for different uses. Yet many only understand their business decisions on the basis of cash in and out. These changes present the tax practitioner with more challenges than ever. This paper considers how to apply the trading stock provisions in this ever changing environment.
Specific topics include:
- trading stock provisions generally
- what is stock “on hand” – not as straight forward as you think
- extensions to and departures from the basic definition of trading stock
- how to handle “uncertain future use”
- disposals of trading stock not in the ordinary course of business
- valuation options and full absorption costing
- industries specific issues and examples.