The Accounting Council have decided to make "fair value" for biological assets optional rather than mandatory as the minutes of their July meeting have been published.
The withdrawal of proposals to amend the rules of agricultural stocktaking will come as a huge relief to most farmers, according to Larking Gowen agricultural partner, David Missen (pictured) who said:
"For several years there has been pressure for the UK to change its accounting standards to align with international treatment which would mean farmers would be required to value their year end stock at market value rather than cost of production.
While this may sound like a small technical difference it would have meant paying tax on the estimated profit of the crop while still in the ground.
"Our Institute's Farming Group has been lobbying against this rule change for many years and I have recently been personally involved in the process. Our firm has contributed examples to the Institute, showing how unfair the rule change would be.
"We are very pleased that the Accounting Council has recommended businesses will be able to choose which treatment is more appropriate in future. At the risk of using a cliché, it is a real victory for common sense."
Larking Gowen is registered to carry out audit work in the UK and Ireland by the Institute of Chartered Accountants in England & Wales. Authorised and regulated by the financial services authority. A member of MHA.
