The farm accountant assigns base values to replacement animals as they enter the breeding herd or flock.
When the base values are changed, Gains/Losses Due to Changes in General Base Values of Breeding Livestock reports these changes on the income statement below Net Farm Income from Operations.
When animals enter the breeding herd and when they move through transfer points, the farm accountant assigns base values appropriate for the age group.
When base values change, the balance sheet and the income statement are affected.
Income statement reports Gains/Losses Due to Changes in General Base Values of Breeding Livestock
Calves: 8 x $400 = $3,200 Bred Heifers: 1 x $400 = 400 Cows: 0 x $200 = 0 Change in value due to age progression: $3,600 The income statement reports the following: Loss from Sale of Culled Breeding Livestock (1,200) Change in Value Due to Change in Quantity of Raised Breeding Livestock 3,600 Gross Revenue $ Operating Expenses +/- Accrual Adjustments $ Interest Expense +/- Accrual Adjustments $ Net Farm Income from Operations $ Gain Due to Changes in General Base Values of Breeding Livestock $ Net Farm Income, Accrual Adjusted $
The change in value from the previous category is the difference between the per head base value at the beginning of the year and the per head base value of the category that the animals transferred into.
of new Change in Total Category animals Base Value Change Calves 8 $400 $3,200 Bred Heifers 1 400 400 Cows 0 200 0 Total $3,600