stock right off

[kellytoys]

Hi

Please can I ask how old stock needs to be before you can class it as nil value for tax return purposes. I have tried to find the answer on h m website but cannot find it.

thank you

 

[Zeno]

There is no limit or rules in terms of age. Your stock should be valued at the lower of cost or net realisable value (how much you could actually sell for if less than cost). If the NRV is £0 then it should be written off fully.

 

[Maslins]

There's non black & white answer to that.

Stock should be valued at the lower of cost and net realisable value (NRV).

NRV essentially means the most you could get for it less costs to sell. i.e. stock bought for £100, but which is now only worth £90 & it'll cost you £20 to shift it (selling costs) has a NRV of £70, and that's what it should be valued at in the accounts.

In order for you to value a stock line at zero, essentially you need to be able to argue that it is worthless. I would suggest this is unlikely (as if it was, you would throw it out rather than hold onto it). Therefore just value it at its NRV, which is presumably lower than cost, but higher than zero.