Stock valuation

[TAB]

Hello, I wonder if anyone can help please? I have a client who dog sits & breeds dogs, therefore a stock valuation of dogs needs to be done. Any ideas as to how I go about this?:confused1:

[T.C.]

I would have thought you would have to treat dogs like any other material item - at cost price. Therefore whatever it has cost to "make" the dog! That is what I would think anyway.

[TAB]

That seems to be the general consensus. Thanks for replying T.C.:001_smile:

[bryan100]

It depends on the numbers involved, but a form of herd accounting may be more appropriate. I have done this for cows, sheep and fish so I don't see why dogs should be any different.

[TAB]

Thanks Bryan. My client has now said that the dogs held at the year end are to be kept for breeding only and it will be the puppies that she sells. I spoke to the technical accounts advice line provided FOC to AAT members and a woman from ICAEW said that the dogs should be capitalised and depreciated.
I forgot to ask whether capital allowances could be claimed, any ideas?

Thanks

[T.C.]

I used to claim capital allowances on horses which were used as part of a horse-drawn funeral business - if that helps! This was on HMRC's advice.

[TAB]

Did you claim first year allowance? Do you claim the capital allowances @25%? What percentage did you depreciate the horses at? A lot of questions I know but would be very grateful for your answers T.C.:001_smile:

[Dean]

CA21220 - PMA: Meaning of plant & machinery: Animals
CAA01/S38
Accept a claim for PMAs on an animal if the animal functions as apparatus with which the trade is carried on and it has an expected life of 2 years or more. For example, it is likely that a horse used in a riding school or show jumping business, a guard dog or a circus animal is plant.

Do not accept a claim that a farm animal such as a horse, cow or sheep is plant, unless it is a working animal such as a sheep dog. Farm animals are normally trading stock and their cost is revenue expenditure that bars a capital allowance claim. Alternatively, the farmer may have made an election for the herd basis under ITTOIA/S111 or ICTA88/SCH5/PARA2. This also means no capital allowances may be made claimed on these animals.

You should treat a share in an animal in the same way.

:001_smile:

Regards

Dean

[TAB]

Many thanks :thumbup: