15 April 2016
A trader of share whose accounts are subject to audit u/s 44AB of IT ACT, 1961. In last financial year i.e.2014-15, his closing stock was valued at market price as on 31-03-2015, market price being less than cost price. For financial year 2015-16, he wants to value his closing stock of shares at cost price only. This year also market price is lower than cost price. Can he do so? What disclosures need to be made?
15 April 2016
Dear, Stock is to be valued at cost or NRV (Net Realisable value) whichever is lower. Hence, if market price is lower you have to value your shares at market price only.
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