Trading Stock
S1: includes anything produced, manufactured, constructed,
assembled, purchased. It also includes proceeds from the disposal of
which forms part of GI unless it is a recovery in s8(4).
Excludes foreign currency and forward exchange contract.
Cost of sales:
Opening stock s22(2) -
Purchases s11(a) -
Closing stock s22(1) +
s22(1) Closing stock
value =
- cost price
- less impairment (except financial instruments)
- thus shares = @ cost
Volkswagen Case
Trading stock cannot be valued @ NRV. The cost is the base line
unless SARS feels that it is worth less.
, Opening stock s22(2)
“2022 preceding YOA = 2021”
Value =
- CB of previous year
- not CB? = COST
E.g asset acquired for marketing purposes forms part of trading
stock.
CGT assets becomes part of trading stock deemed to reacquire @
MV.
Ernest Best Trust case
Land is NOT trading stock, but the sand is (e.g Donovan) if it can be
separated from the group.
Therefore TS = ready for use/ disposed of.
S1: includes anything produced, manufactured, constructed,
assembled, purchased. It also includes proceeds from the disposal of
which forms part of GI unless it is a recovery in s8(4).
Excludes foreign currency and forward exchange contract.
Cost of sales:
Opening stock s22(2) -
Purchases s11(a) -
Closing stock s22(1) +
s22(1) Closing stock
value =
- cost price
- less impairment (except financial instruments)
- thus shares = @ cost
Volkswagen Case
Trading stock cannot be valued @ NRV. The cost is the base line
unless SARS feels that it is worth less.
, Opening stock s22(2)
“2022 preceding YOA = 2021”
Value =
- CB of previous year
- not CB? = COST
E.g asset acquired for marketing purposes forms part of trading
stock.
CGT assets becomes part of trading stock deemed to reacquire @
MV.
Ernest Best Trust case
Land is NOT trading stock, but the sand is (e.g Donovan) if it can be
separated from the group.
Therefore TS = ready for use/ disposed of.
