460 



Farm Accounts. 



[SEPT., 



accounts as these are opened. The best time for one already 

 in business to commence systematic book-keeping is the usual 

 date at which farm tenancies commence in the district. In 

 this case the first step is a valuation of everything connected 

 with the business, and the -entry of the values in their re- 

 spective ledger accounts. 



A simple valuation at. the close of each year is essential if 

 the accounts are to show the true financial position of the 

 farmer, or the profit or loss on particular departments. It 

 is of the utmost importance that as exact an estimate of the 

 values as is possible be secured. There is a difference of 

 opinion, however, as to whether the ordinary live stock of 

 the farm should be valued in accordance with the fluctuations 

 of the market at the prices prevailing at the time, or whether 

 they ought to be valued each year at the same price per 

 head for stock of a similar class and age. The former method 

 shows the value which would be realised if the stock were 

 sold, but, even in a time of inflated prices, they cannot be 

 disposed of, as they are required for carrying on the busi- 

 ness. In such cases this method may show profits which 

 are not actually secured, while in a period when low prices 

 prevail it may indicate losses which are not really sustained. 

 Valuation at a regular and medium price per head is on this 

 account to be preferred. It gives more exactly the profit 

 actually realised under the circumstances, so long as the 

 quality of the stock remains practically unchanged, and it 

 has the advantage of being less troublesome. In the same 

 way the whole of the machinery and implements need not be 

 valued individually each year. If, say, from 10 to 15 per 

 cent, of the value of these, according to whether there is little 

 or much expensive machinery which decreases rapidly in 

 value, is written off each year as depreciation, the result will 

 in most cases not be far wrong. A valuation in detail may 

 be made after an interval of a few years, to check the correct- 

 ness of the allowance and to furnish the correct percentage 

 to be allowed in future. 



Profit or Loss on Various Departments. — The advantage 

 to a proprietor of a knowledge of the exact results, as regards 

 the profitableness or otherwise, of the various departments of 

 his business, is evident, and requires no demonstration. 



