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I'm new to this stock taking business but must perform one for my limited company and forward info to my accountant asap. Can someone please clarify if I am to include VAT (company is not VAT registered so must cannot claim this back), and carriage charges when working out unit price.
e.g if I ordered 5000 units of something do I just divide the cost of item by 5000 or do I divide total cost which includes carriage charge and VAT by 5000?
Many thanks
e.g if I ordered 5000 units of something do I just divide the cost of item by 5000 or do I divide total cost which includes carriage charge and VAT by 5000?
Many thanks
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Your stock is worth a realistic figure to you based principally on what you paid for it, so the total, including VAT and carriage would have to be divided by the number of units to come to that figure.
BUT you have to use common sense to set a value, if it is a regular day-to-day commodity then above would be sensible. If however, your stock comprises of something which now varies wildly from what you paid then that should be borne in mind. Just suppose you bought LOTS of video-tape recorders some years ago at hundreds of pounds each, but are now virtually worthless, it is no use kidding yourself you are sitting on a fortune, is it? You could of course go the other way, and your stock could be worth a lot more than you paid because if something unforseen happened it would cost you a lot more to replace it. Your accountant should be able to help you establish the true value to put in your accounts so that you have a proper value for your business. Whether or not, he uses a little creativity for income tax liability is another matter.
BUT you have to use common sense to set a value, if it is a regular day-to-day commodity then above would be sensible. If however, your stock comprises of something which now varies wildly from what you paid then that should be borne in mind. Just suppose you bought LOTS of video-tape recorders some years ago at hundreds of pounds each, but are now virtually worthless, it is no use kidding yourself you are sitting on a fortune, is it? You could of course go the other way, and your stock could be worth a lot more than you paid because if something unforseen happened it would cost you a lot more to replace it. Your accountant should be able to help you establish the true value to put in your accounts so that you have a proper value for your business. Whether or not, he uses a little creativity for income tax liability is another matter.
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