Depreciation in stock valuations

Article by Colin Davis, Technical Officer, CIOT, and John Cullinane, Chairman of the Corporate Tax Sub-Committee. This article appeared in the May 2003 issue of Tax Adviser. KEY POINTS

• The argument continues that where cost of closing stock includes depreciation of fixed assets, the full amount of depreciation written off fixed assets in the accounting period should be added back for tax purposes
  
• This follows publication of articles in professional journals and apparent change of practice by the Inland Revenue
  
• Revenue do not consider that there has been a change of practice, rather that the existing rules are being applied more rigorously than before
  
• This change has been encouraged by a stretched analogy to a Hong Kong case
  

To download the article in Adobe (pdf) format, please click on the link below.

Technical Department
020 7235 9381

May 2003 by Colin Davis