A/c Treatment of Livestock

Hi All,

Accepted that AS-10 doesnot deal with live stock..but does that mean livestock is not an asset..??

Non dealing of a particular assets by a particular Standard is not suggestive of character of a item..

As-10 also doesnot deal with some other asset..are not they asset. you mean.???similarly some particular AS's deals categorically with some particular ones..are all other items not qualify a asset

Live stock is an asset for sure..And treatment rightly suggested by Mr. Giridharan in attached link..

Regards,

Livestocks are not Fixed Assets as per AS-10 Accounting for F.A.
 

According to Accounting standard, livestock we should not treat as Fixed Asset.

We can do accounting of livestock as deferred revenue expenses (since some livestock have more then one year life) as a alternative way

Dear Friends,

Although AS10 mentions of exclusion of livestock from this standard but it does not mean that livestock should not be treated as Fixed Asset. Schedue Vi, part 1 of the Companies Act mentions that Fixed Assets should be distinguished as far as possible between expenditure upon (a) goodwill, (b) land, (c), buildings, (d) leaseholds, (e) railway sidings, (f) plant and machinery, (g) furniture and fittings, (h) development of property, (i) patents, trade marks and designs, (j) livestock, and (k) vehicles, etc.

Hence livestock should be treated as part of fixed asset to be shown in Gross Block summary of a company.

For the trader, it will be stock in trade and for others, it will be asset. however, AS 2 or AS 10 will not be applicable on the same as also AS 6.

Further, many had doubt regarding accounting treatment where the item is specifically excluded from an AS. Friends, exclusion does not mean that it will not be accounted for. It simply means that the item is not covered by that particular AS. e.g. Mines. Mines are specifically excluded from AS 6. IT does not mean that these will not depreciate. It only means that AS 6 will not be applicable in that case. It will be depreciated as per depletion method or any other logical method. 

Regards, CA Shakuntala Chhangani

Shakuntala madam has made it clear i think......

Thanks mam

please tell me that if i capatalize lifestock in fixed asset then how will i enter its detail in schedule mentioned in itr -4

AS-10 is for ACCOUNTING FOR FIXED ASSETS, not for definition of fixed asset. So, as per AS-10 any provision of this AS does not deal with livestock. It doesn't mean that livestock is not considered as fixed assets. 

So, Livestock is fixed asset.

AS-6 doesn't deal with depreciation of Livestock. so, no depreciation should be charged on livestock. However, in case of death of livestock deduct that value from the total value of livestock.
Thats all..
 

REGARDING LIVE STOCK

ACCOUNTING :-

IF 'A' PURCHASED BUFFALOWS FOR HIS MILK BUSINESS , IT IS TO BE CONSIDERED AS FIXED ASSET (LIVE) AND , AND DEPRECIATE THE VALUE @ 20% .

SO THAT IF 'A' SOLD  BUFFALO AFTER 2 YEARS OR DEATH OF BUFFALO , PROFIT & LOSS ACCOUNT NOT AFFECTED HEAVILY.

IS IT CORRECT ?

Pls click this link - monograph on accounting for livestock

https://books.google.co.in/books?id=neDFWDyUWuQC&pg=PA469&lpg=PA469&dq=monograph+on+accounting+for+livestock&source=bl&ots=7avfPo9z7J&sig=IemsddxBIgeajHZrzbJNLFiH2ig&hl=en&sa=X&ei=9Es0UcmGMIPZrQeLx4HoBA&sqi=2&ved=0CC4Q6AEwAA#v=onepage&q=monograph%20on%20accounting%20for%20livestock&f=false

I agree with you as well with Mr Satvir Singh that Live stock is an ASSET. Now coming to valuation of the same we follow revaluation method(i.e) CURRENT SET OF LIVE STOCKS  ARE REVALUED at the end of every financial year.

Please send me some clear workings with example under different scenarios.

Indian Accounting Standards 41 – Agriculture (Ind AS 41) has introduced the concept of biological assets where a biological asset is defined to be a living animal or plant, and includes produce growing on bearer plants

what are the journal entries for the sale of a livestock and than retaining the same livestock for breeding purpose

what are the journal entries for the sale of a livestock and than retaining the same livestock for breeding purpose