Stock on hand
You are required to value your livestock at the end of each year as part of determining your net income from primary production.
You can choose to value livestock on hand at the end of the income year at cost, market selling value or replacement value. An additional option is available for certain horse breeding stock, see Taxation Ruling TR 2008/2 Income tax: various income tax issues relating to the horse industry; including whether racing, training and breeding activities (carried out as stand-alone activities or in combination) amount to the carrying on of a business.
You may change the basis of valuation year by year and different valuation basis may be adopted for individual livestock. The value of your opening livestock on hand on 1 July 2023 should be the same as the value of your closing stock on 30 June 2023 that you used for your 2022–23 tax return.
Small business entities
You don't have to value each item of trading stock (including livestock) on hand at the end of 2023–24 or account for changes in the value of your trading stock for 2023–24 if:
- you were a small business entity for 2023–24
- you choose to access the simplified trading stock rules
- the difference between the value of all trading stock on hand at the start of 2023–24 and the value you reasonably estimate of all your trading stock on hand at the end of 2023–24 is not more than $5,000.
However, if you prefer, you can still conduct a stocktake and account for changes in the value of trading stock for 2023–24 even if the difference is not more than $5,000.
Oyster farmers
Oyster farmers are required to account for oysters on hand as trading stock. This includes oysters held on sticks, in trays or harvested and held ready for sale.
Bees
Entities carrying on a business of beekeeping for the purpose of honey production are required to account for bees on hand as trading stock. You may be eligible to use a simplified practice of valuing a live hive rather than accounting for the individual bees.
Goods taken from stock for private use
If you take goods from stock for your own use, or for the use of your family members, you are required to account for the goods as if the stock had been disposed of at its cost.
This includes the situation where a grazier slaughters livestock for personal consumption or for rations for employees.
Natural increase
The cost of an animal you hold as livestock that you acquired by natural increase is whichever of these you elect:
- actual cost of the animal
- cost prescribed by the regulations
- cattle, horses and deer $20
- pigs $12
- emus $8
- goats and sheep $4
- poultry 35 cents.
If your business involves breeding exotic animals (for example, ostriches or alpacas), contact us to confirm the appropriate cost. For more information, see Primary production activities.
You must value a horse acquired by natural increase and included in livestock on hand at a cost not less than the insemination service fee attributable to acquiring the horse.
Continue to: Abnormal receipts
Return to: Depreciating assets and capital expenditure