Ordinary income from a business—treatment of trading stock
1208A Ordinary income from a business—treatment of trading stock
For the purposes of this Division, if:
a company or trust carries on a business; and
the value of all the trading stock on hand at the end of a derivation period is greater than the value of all the trading stock on hand at the beginning of that derivation period;
the company’s or trust’s ordinary income for that derivation period in the form of profits from the business is to include the amount of the difference in values.
For the purposes of this Division, if:
a company or trust carries on a business; and
the value of all the trading stock on hand at the end of a derivation period is less than the value of all the trading stock on hand at the beginning of that derivation period;
the company’s or trust’s ordinary income for that derivation period in the form of profits from the business is to be reduced by the amount of the difference in values.
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