居住者の棚卸資産につき第三十七条第一項（必要経費）の規定によりその者の事業所得の金額の計算上必要経費に算入する金額を算定する場合におけるその算定の基礎となるその年十二月三十一日（その者が年の中途において死亡し又は出国をした場合には、その死亡又は出国の時。以下この条から第五十条までにおいて同じ。）において有する棚卸資産（以下この項において「期末棚卸資産」という。）の価額は、棚卸資産の取得価額の平均額をもつてその年十二月三十一日において有する棚卸資産の評価額とする方法その他の政令で定める評価の方法のうちからその者が当該期末棚卸資産について選定した評価の方法により評価した金額（評価の方法を選定しなかつた場合又は選定した評価の方法により評価しなかつた場合には、評価の方法のうち政令で定める方法により評価した金額）とする。
In the calculation of the amount that, pursuant to the provisions of Article 37, paragraph (1) (Necessary Expenses), is included, in association with the Inventory of a Resident, in the necessary expenses that are used to calculate the Resident's business income, the value of Inventory held by the Resident on December 31 of the relevant year (or at the time of the Resident's death or Absence From Japan, if the Resident dies or the Resident's Absence From Japan occurs partway through the year; the same applies in this Article through Article 50) which is used as the basis for that calculation (hereinafter referred to as "closing Inventory" in this paragraph) is the amount of money assessed based on the valuation method that the Resident has selected for the closing Inventory from among the method of taking the average acquisition cost of Inventory as the assessed value of the Inventory held on December 31 of that year and the other valuation methods prescribed by Cabinet Order (or based on the valuation method prescribed by Cabinet Order, if the Resident does not select a valuation method or if the value is not assessed based on the selected valuation method).
Cabinet Order provides for special provisions on the selectable valuation methods referred to in the preceding paragraph, the way of selecting a valuation method, the acquisition cost of Inventory to be used as the basis for calculating the assessed value of Inventory, and other necessary particulars concerning the valuation of Inventory.