Hi Guys,

I'm in a bit of a dilemma of whether or not i am required to do a stock take for my business?

When i first saw my dad's accountant over 12 months ago she never mentioned to me that i was required to do one, however it looks like everyone on here is doing it.

From the looks of the ATO website here:

http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/76494.htm&page=19&H19

in my head it read that i am required to do it however my partner reads it differently. It says you may not be required to do a stock take if you turnover is less than 2 million (which mine isn't by a long shot) AND the difference between the value of your opening stock and a reasonable estimate of your closing stock is $5,000 or less.

I however have no opening stock value as i never did a stocktake, so basically the difference would be the value of my stock minus $0 which would be well over $5000. Because of the use of the word AND in the statement on that website though, then wouldn't that mean if i don't meet both of those requirements then i don't have to do one?

If i am required then shouldn't it say something like :

You may not be required to do a stock if you annual turnover is under 2 million OR the difference between your opening stock and closing stock is 5000 or less.

My partner's mum is also an accountant and reads that website as me not needing to do one.

So im very confused now, i was sure i needed to do one. If it turns out i do need to do a stock take, then wouldn't i basically have to add up the cost value of my stock (say $7000) and then add that onto my yearly profit (say $40,000 sales, minus $30,000 expenses makes 10,000 taxable income + $7000 in stock adjusting my taxable income to $17,000?) This should make up for the previous year not doing a stock take right? because i am adding the entire value of stock?