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Neelam (Student CA Final,)     16 June 2010

A/c Treatment of Livestock

Please help me for solving this problem ???/

what is the accounting treatment of livestock ???

I mean whether livestock can be treated as fixed assets ??

If yes then in that case how to measure the value of livestocks every year ,,

m asking such a question becoz as per sec.43 of Income Tax livestocks r not depreciable Assets ,,,

Please explain relevant AS  or relavant Law / Act ,,????



 27 Replies

CA. Praveen Gupta

CA. Praveen Gupta (CA )     16 June 2010

fixed assets

 

Historical cost

1 Like
SUDHIR & PRADEEP JI

SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA)     16 June 2010

Dear neelam Livestock to be tretaed as Fixed assets & they r valued at there historical cost value
Sarang Agarwal

Sarang Agarwal (Chartered Accountant)     17 June 2010

Can we make a provision for their disposal (death, in this case), as at the time of their death, when we write off their book value, it will lead a greAT IMPACT ON PROFIT OF THAT YEAR.

Amir

Amir (Learner)     17 June 2010

Ahem.........! Para 3 of AS-10 reads as follows- This standard does not deal with accounting for the following items to which special considerations apply: (iv) Livestock
Kalpesh Chauhan,

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))     17 June 2010

 It should be treated as Fixed cost.

It is because it is mostly used in  Farm Accounting.


Giridharan K

Giridharan K (Student)     17 June 2010

 

Originally posted by : Neelam

Please help me for solving this problem ???/

what is the accounting treatment of livestock ???

I mean whether livestock can be treated as fixed assets ??

If yes then in that case how to measure the value of livestocks every year ,,

m asking such a question becoz as per sec.43 of Income Tax livestocks r not depreciable Assets ,,,

Please explain relevant AS  or relavant Law / Act ,,????

It should be understood that accounting and taxation are different. For accounting Livestock should be treated as fixed asset.  however in  case of taxation depreciation is not allowed and it is fully allowed when the livestock dies of no more useful.

saranraj

saranraj (CA FINAL)     17 June 2010

Dear Friends,

All those who said to treat LIVESTOCK as FIXED ASSETS must definitely take a glance on para 3 of the ACCOUNTING STANDARD.....I hope ur opinions will surely change...

R. S A R A N R A J

CA. Mohd. Adnan Ansari

CA. Mohd. Adnan Ansari (Business)     17 June 2010

Livestock is treated as fixed assets, but not depreciable, shown at historical cost.

When livestock is died and anything from the carecase of the livestock is received, Deducted from the historical cost and deduction is taken of remaining amount by debiting profit and loss account

CA Usha Rani Challa

CA Usha Rani Challa (CA)     17 June 2010

Live Stock can not be treated as Fixed Asset, as AS-10 exclusively specifies that that standard does not apply to Live Stock. Then how can we treat it as Fixed Asset?

I think it should be treated as seperate asset better it should be treated as deferred revenue expenditure and charge off the amount to Profit & Loss based on its life.

Satvir Singh

Satvir Singh (Newly minted CA)     17 June 2010

Well, livestock should be part of fixed asset as,  

1) It is used over long term

2) Generates profits

3) not expected to be converted into cash.

 

Regarding depreciation, i m confused and would like eminent memebers to clear the air.

Sudev Namboothiri

Sudev Namboothiri (CA FINAL)     17 June 2010

Sing Litt is right also AS-10 specifically excludes the Live stock..

The confusion will no more after the introduction of IFRS  since IFRS gives treatment of Live stocks..


(Guest)
Originally posted by : Usha Rani
Live Stock can not be treated as Fixed Asset, as AS-10 exclusively specifies that that standard does not apply to Live Stock. Then how can we treat it as Fixed Asset?
I think it should be treated as seperate asset better it should be treated as deferred revenue expenditure and charge off the amount to Profit & Loss based on its life.

 STRONGLY AGREE WITH USHA

Kalpesh Chauhan,

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))     17 June 2010

 

All AS at one place  

https://www.caclubindia.com/forum/all-as-at-one-place-87927.asp  

Giridharan K

Giridharan K (Student)     18 June 2010

 

Originally posted by : RADHEKRISHNA0001




Originally posted by : Usha Rani





Live Stock can not be treated as Fixed Asset, as AS-10 exclusively specifies that that standard does not apply to Live Stock. Then how can we treat it as Fixed Asset?
I think it should be treated as seperate asset better it should be treated as deferred revenue expenditure and charge off the amount to Profit & Loss based on its life.






 STRONGLY AGREE WITH USHA

 Kindly verify Schedule VI of Companies ACT, 1956 which sepecifically includes livestock under the head Fixed Asset and also the article(link provided below) on accounting treatment of livestock.  So that all confusions may be cleared.

https://www.articlesbase.com/banking-articles/need-for-accounting-standards-for-agriculture-and-livestock-272940.html


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