Accounting treatment of live stock

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CA JAYESH RELKAR (Querist)
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29 May 2017 what is the accounting treatment for recording live stock received at free of cost by "Gaurakshan Sansthan" (charitable trust) ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 May 2017 Debit the live stock ac and credit Donation ac based on the market value of live stock. Live stocks has to be valued at the year end, any reduction in value has to be charged to P&L.

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CA JAYESH RELKAR

CA JAYESH RELKAR (Querist)
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30 May 2017 thanks sir,
whether live stock (cows) are fixed asset or not?
what is the criteria to determine it?

what about depreciation? at what rate?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 May 2017 Livestock is treated as fixed assets, but not depreciable, shown at historical cost or market value which ever less at the year end closing date.

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CA JAYESH RELKAR

CA JAYESH RELKAR (Querist)
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31 May 2017 whether Shed to such cows is fixed asset or should be charged to P&L as expense...
if it is a depreciable asset, then at what rate depreciation should be taken ? @10%?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 May 2017 It is a fixed asset charge depreciation over the life of the asset.

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CA JAYESH RELKAR

CA JAYESH RELKAR (Querist)
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31 May 2017 by crediting donation a/c & debiting live stock (cows)... It increases my profit by the donation amount.. !??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 June 2017 Yes it increases your profit. But while working out the application of funds for tax working it is reduced from the profit as money spent under live stock head.

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