Stocktakes for 30 June 2026 – Why They Matter

Now that we have passed 30 June, many businesses have completed their year-end stocktake. While it can feel like a chore, a stocktake is essential for both compliance and understanding how your business has truly performed.

Why Stocktakes Matter

A stocktake involves counting and valuing all inventory on hand at year-end. This directly impacts your profit and tax position:

• Affects your tax outcome: Higher closing stock increases profit (and tax), while lower stock reduces it. Stock figures feed directly into your cost of goods sold (COGS) and profit. Accurate stock equals accurate profit, smoother year-end processing, and better planning for the year ahead.

• Required for compliance: The ATO generally requires businesses with inventory to account for stock at year-end. The exception is if you are a small business entity (SBE) with aggregated turnover under $10 million and you estimate the value of your trading stock has changed by less than $5,000 in the year. The difficulty is if you haven’t undertaken a stocktake, how do you know if it has fluctuated less then the $5,000!

Benefits Beyond Compliance

A proper stocktake can also improve your business:

• Confirms your true financial position
• Identifies damaged, obsolete or missing stock
• Improves purchasing decisions (avoid overstocking slow-moving items)
• Supports better cash flow management
• Ensures stock values aren’t overstated

How Should You Value Your Stock?

Once counted, your stock needs to be valued correctly for tax purposes. The ATO allows a few common methods:

• Cost price (most common): What you paid to purchase or produce the item
• Market selling value (retail value): What you could realistically sell the item for
• Replacement value: What it would cost to replace the item

Key rule: You can generally choose the method per item, but you must use a reasonable and consistent approach.

Practical guidance:

Most businesses use cost price as the default. However, if stock is slow-moving, damaged or obsolete, you can write it down to market selling value (often lower than cost).

You should not overstate stock at retail selling prices if they are unlikely to be achieved, however writing stock down appropriately can reduce taxable income while ensuring your accounts reflect reality.

Do You Need a Stocktake?

Most businesses with trading stock should complete a stocktake as at 30 June each year (or some businesses have different financial year ends).

Small businesses may skip it only if stock movement is $5,000 or less, but best practice is still to do one to ensure accuracy.

Need Help?

If you’re unsure about your stocktake, how to value your stock or the $5,000 rule, our team at WLF Accounting & Advisory can help ensure your stocktake is accurate and compliant. For WLF clients, please forward to us for our files your recent stocktake so we can take up in your businesses financial statements.