Inventory by Artist

[Vikas Aggarwal]

Dear Sir \ Madam,

It is requested you to please give your valuable suggestion of following issues:-

1. An artist sale his painting work to art gallery on consignment basis, whether he is liable to maintain record for the same (Means maintain stock is mandatory).

If yes what is the valuation of stocks.

2. Income on sale of its art works by artist is professional income or business income, or they can liable to maintain stocks.

3. The artist is follow receipt basis of accounting, treat as sale when amount realized from  art gallery in this case how they can maintain its stock, is only consignment note is sufficient record or not.

 

Regards,

CA Vikas aggarwal

 

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

Whether you have clarified in the said issue? If not please inform.

AI Summary

Stock maintenance obligations for artists determine whether consignment sales yield business or professional income classification. Whether an artist who delivers paintings to an art gallery on consignment must maintain stock records and how such consignments should be valued are posed as primary compliance questions. The enquiry seeks the applicability of inventory maintenance where title or control is retained, the appropriate valuation of artworks held on consignment, and whether a consignment note and related records suffice as evidence of stock. It also asks whether receipts from sale are business or professional income under receipt-based accounting.