FARM ACCOUNTS 135 



remuneration for his personal services. A definite de- 

 duction should be made for this. 



Again, taking the profit in terms per acre, ^i 6s. is 

 clearly an impossible figure ; much too low. If reference 

 is made to Mr. Strutt's statement (page io8) one can be 

 well assured that, if his profit was over ^i per acre in 

 1 91 2, the profits in 191 8-19 must exceed ,^1 6s. per 

 acre ; and the writer knows one farm intimately, on 

 poor land but under particularly able management, 

 where the net receipts per acre were over l^^ during the 

 whole period of the war. Further, this profit oi ^\ 6s. 

 per acre does not represent excess of receipts over 

 expenditure, but is entirely earned by increase in 

 valuation : i.e. the stock, etc., on the farm was worth 

 more at the end of the year than at the beginning. And 

 if really valuable accounts are to be kept, one of the first 

 principles to recognize is that the valuation and variation 

 in stock, etc., should come under the head of " capital 

 account," and not " current account." 



The net profit on a farm should be the excess of 

 receipts over all expenditure during the " farm year." 



Increase in stock which could have been sold, but was 

 not sold, should not come in ; that increase comes into 

 the " capital account," and may or may not be realized 

 during a subsequent year. 



In my own farm accounts the stock is still returned 

 at pre-war values ; all I want to know is whether the 

 original working capital, that I put into my farm, is 

 covered by the stock, etc., at present on the farm — 

 valued by a professional valuer and at original prices. 



If I wind up my business, and retire with an increased 

 capital, that increase should be shown as capital, and 

 not as an annual profit. 



I am sure that Sir A. D. Hall is right in keeping to a 



