Varun Bhat (Student CA IPC / IPCC) (151 Points)
19 July 2016Hi everyone,
I've been assigned to do the tax audit of an individual engaged in trading of securities.
My question is : how should we value the closing stock of this person ? Should we go for FIFO/LIFO ? Kindly suggest.
P.s If in case you have any references like a write up, kindly provide me with that too. :)
CA Saurabh Singh
(Practising Chartered )
(974 Points)
Replied 20 July 2016
Hello Varun,
The securirties valuation should be done as per FIFO method.
The same shall be valued as being done in case of valuation of stocks
CA Kishore D
(Management Consultant | Trainer)
(324 Points)
Replied 23 July 2016
Hi Varun,
Valuation of stock-in-trade of a stock trader/broker is covered under AS-2 Valuation of Inventories. Accordingly FIFO and WAC can be followed for valuation of closing stock. LIFO is not permitted.
CAclubindia
