2754

NEW ZEALAND GAZETTE

No. 133

(in all cases other than pigs) shall be subdivided and be deemed to be aged as follows (from newest to oldest):

(a) Rising two year female breeding stock;

(b) Older classes of female breeding stock (subdivided and ranked from newest to oldest to the extent possible having regard to the taxpayer’s preceding tax accounting system);

(c) Non-breeding livestock (excluding male non-breeding dairy cattle and male non-breeding beef cattle);

(d) Male breeding stock.

In the case of pigs, the mature livestock included in opening inventory in the income year shall be subdivided and be deemed to be aged as follows (from newest to oldest):

(a) Weaner pigs less than 10 weeks of age;

(b) Growing pigs between 10 and 17 weeks of age;

(c) Pigs over 17 weeks of age;

(d) Breeding sows less than one year old;

(e) Breeding sows over one year of age;

(f) Breeding boars.

The FIFO system will be applied accordingly, in the income year in which the national standard cost scheme is first adopted and in subsequent income years in which it is used, so that dispositions and deaths are deemed to reduce first the oldest still existing class of mature livestock.

21. Change from national standard cost scheme to the herd scheme, market value option or replacement price option for any complete inventory grouping

Irrespective of which cost flow identification system was used in the income year preceding the year of the change, the opening value of the inventory grouping in the year of change shall be treated as being equal to the value for tax purposes at the end of the immediately preceding income year. A value of the livestock at the end of the year of change will be calculated accordingly under the chosen valuation option on a class-by-class basis.

22. Change from national standard cost scheme to the herd scheme for some livestock only

If the number of livestock of an inventory grouping moved from valuation under the national standard cost scheme to valuation under the herd scheme in any income year still leaves some livestock of the particular inventory grouping to be valued under the national standard cost scheme at the end of the income year, then paragraphs 23 to 25 (as appropriate) of this determination shall apply.

23. Average cost system used in year preceding the year of change

If the average cost system of cost flow identification was used in the income year preceding the income year of change to the herd scheme, the number of livestock moved to the herd scheme shall be accounted for as if they were livestock disposed of or dying in the income year (see paragraphs 13 and 14 of this determination). No other adjustment is required to opening inventory numbers and costs.

24. FIFO system used in year preceding the year of change

If the closing inventory system used in the income year preceding the income year of the change to the Herd scheme was the FIFO system, then the number moved to the Herd scheme will be deemed to have been derived from the oldest inventory on hand at the opening balance date in the income year of the change to the Herd scheme in the same manner as sales and deaths are accounted for when using the FIFO type of inventory system unless the inventory account has been accurately prepared on an age class by age class basis with the appropriate costs per head recorded for each group of livestock in each age class, under which conditions, the adjustment to closing inventory numbers and costs can be made on a class by class basis.

25. Change in cost flow identification system in the same income year as some livestock are moved from the national standard cost scheme to the herd scheme system of valuation

If a change in the cost flow identification system is made in the same income year as some livestock are moved to the herd scheme, this adjustment shall be effected only after the appropriate adjustment has been made for moving those livestock to the herd scheme on the basis of the cost flow identification system used in the immediately preceding income year.

26. Complete change from national standard cost scheme to self-assessed cost or from self-assessed cost to national standard cost scheme

The value of livestock of each type on hand in each inventory grouping at the end of the immediately preceding income year under the preceding method will be deemed to be the opening value of livestock of that type in that inventory grouping in the year of change. Any change in the cost flow identification system accompanying the change will be subject to paragraphs 15 and 25 of this determination.

27. Transition to National Standard Cost (and National Standard Cost in Combination With Other Valuation Options) in 1992–93 Income Year

Where livestock has been valued under the trading stock scheme in the 1991–92 income year, and the taxpayer may elect whether the opening value of the rising one year classes of livestock and rising two year male non-breeding cattle on hand at the start of the 1992–93 income year shall be, for the purposes of calculating the value of livestock of the taxpayer on hand at the end of the 1992–93 income year, either:

(a) The trading stock scheme value of that livestock at the end of the 1991–92 income year; or

(b) The average closing cost calculated for that inventory grouping of livestock under the provisions of section 86C of the Act and under this determination in relation to that stock for the 1992–93 income year and using stock numbers and purchased costs as contained in the 1992–93 financial account.

Opening values in the 1992–93 income year where other than the Trading Stock Scheme was used to value livestock in the 1991–92 income year

In relation to livestock valued in the 1991–92 year under any valuation option other than the trading stock scheme, the opening value of the livestock in the 1992–93 income year shall be the value of the livestock at the end of the 1991–92 income year.

28. Treatment of livestock in the 1992–93 income year for NSC purposes when changing from the trading stock scheme to any other valuation option in the 1992–93 income year

The treatment of livestock value or cost at the beginning of the 1992–93 income year will be determined in accordance with either of paragraphs 29, 30 and 31 of this determination as appropriate.

29. Trading stock scheme to national standard cost scheme

The closing value in the 1992–93 income year will be calculated in accordance with paragraphs 3 to 7 of this determination and the other provisions of this determination which relate to those paragraphs. The opening cost shall be calculated in accordance with paragraph 27 of this determination.

30. Trading stock scheme to national standard cost scheme where national standard cost is to be used in conjunction