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.
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
CAclubindia
