For anyone who is interested in this field, I have found a extremely useful body offering courses/ information etc.
However, in the meantime I have a problem understanding how to show unrealised profit in the profit and loss account.
My accounts show
Sales
Less Cost of Sales
Opening Stock +
Purch +
Livestock Feed +
Auction Fees
- Closing Stock
This gives me a negative figure due to the high figure for closing stock (result of lots of multiplying and new babies). I then realise I have a gross profit figure showing unrealised profit but I am unsure how to calculate the amount of unrealised profit or how I then offset this.
Hope this makes sense and someone understands my babbling
Valerie
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Valerie
I left this a day or two to see if anyone else piped up with an answer. I dont have the farming accounts experience and dont really like to push you towards Aweb, given they are a much less friendly bunch than us and their website is a nightmare. But I would suggest you try that, and put farm accounts in the search engine - will bring up a pile from years ago, but also the more recent ones - there are a few bods on there who have the experience of such. Failing that - I would ask the question over there (but it is like a vipers den so if they get to insulting you please dont take it to heart, they do it with everyone!
HTH
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I do understand that this is a specialised area and I get the impression that experienced people in this field do not like to share their knowledge. Searches on the web have proved pretty useless.
Not like this wonderful friendly forum on the other hand. Always someone willing to help out.
Thanks again
-- Edited by lots to learn on Wednesday 6th of July 2016 10:06:35 PM
__________________
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I know a bit about farming account (specially the tax side) , but I don't understand why you have a high negative figure. Closing stock should always be the "lowest" cost it could be.
The "deemed" cost should be the LOWER of the actual cost of producing the stock, or 60% or 75% of the open market value (depending on the type of livestock).......
However if you have unrealised profit, normally you'd make a provision for this and take it off the balance sheet, so profits and assets are not overstated.
Thankyou so much for your reply and sorry I did not notice it sooner.
After much deliberation over this, I feel I have been overthinking it. I think I have become confused as this is a relatively new business where the starting point was only a few sheep and the flock has grown considerably due to purchases and births. Closing stock does appear quite high because naturally the flock has grown.
In my less confused state I have tried to consider this in much the same way as any other business and it seems to make more sense. I think my problem was the fact that in most other businesses the stock doesn't reproduce! and I felt that these new lambs were somehow being taxed at this point and again when they are sold.
I'm rambling now but I think I may be there
Many thanks
__________________
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
