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 ,,????
fixed assets
Historical cost
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.
| Originally posted by : Neelam | ||
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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 ,,???? |
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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.
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
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
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.
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.
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..
| Originally posted by : Usha Rani | ||
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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. |
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STRONGLY AGREE WITH USHA
| Originally posted by : RADHEKRISHNA0001 | ||
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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 |
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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.
CAclubindia
