BIM33100 - Stock: valuation: contents

The guidance in this chapter includes not only information on the acceptable valuation bases but also some descriptive paragraphs to give a feel for the important factors in a stock valuation. Stock valuation can never be absolutely precise, with a number of practical considerations affecting the accuracy of the estimate. GAAP provides the starting point for stock valuation for tax purposes, but you should note that it does not always prohibit methods such as last in first out (LIFO) for costing stock. LIFO is not an allowable method for valuing stock for tax purposes.

There is extensive guidance on valuing farm stock in HMRC help sheet HS232.

There is more detailed guidance on motor dealers’ stock at BIM52001.

1. BIM33110

   Tax treatment of trading stock: Lord Nolan in Threlfall v Jones
2. BIM33115

   The valuation bases
3. BIM33120

   FIFO not LIFO: Minister of National Revenue v Anaconda American Brass Ltd
4. BIM33125

   Non-allowable bases of valuation
5. BIM33135

   Lower of cost and net realisable value: cost
6. BIM33140

   Lower of cost and net realisable value: net realisable value
7. BIM33145

   Net realisable value: use of formulae, slow moving stock, acceptable accuracy
8. BIM33150

   Stock provisions
9. BIM33155

   Valuing construction contracts
10. BIM33160

    Mark to market or marking to market
11. BIM33165

    Professional work-in-progress: general principles
12. BIM33190

    Depreciation in stock
13. BIM33199

    Change of accounting or tax basis of stock valuation