By Dina Veljanovska
We’re constantly working on our product to give you the simplest and fastest experience at tax compliance, so that you can focus on the more important stuff such as advisory.
The NZ Income Tax Act treats specified livestock owned by a farming business in a similar fashion to trading stock, notwithstanding the characteristics of the herd scheme. The two most common methods of valuing specified livestock are the herd scheme and the national standard cost (NSC) scheme. Figured supports both Herd Scheme and NSC methods of valuation, however when switching between the two schemes, certain calculations were sometimes lost.
You can now value your client’s livestock using the National Standard Cost (NSC) method from within the Figured app, far more accurately.
What we’ve done
We’ve improved our NSC valuation calculations in the following ways:
- We are now natively supporting clause 28 of the NSC determination: auto-calculating retrospective values needed for mature and maturing stock on NSC, where Herd Scheme was the only valuation method used previously.
- We have updated the immature NSC calculation to match IRD's definition of 'homebred': (closing R1 stock + R1 sales - R1 purchases).
- We have updated the mature NSC calculation to include negative reconciling figures in its death tally as they reduce the herd number overall.
What this means for you
Each year-end, New Zealand livestock farmers need to value their livestock for tax purposes. One method of doing this is the NSC valuation, which is the most complex way to value livestock. It requires calculations set out by the IRD based on age, purchase price, use of livestock and fixed National Standard Costs, set out by the IRD and re-published each year.
Previously, Figured’s automated NSC calculations didn’t take into account some important rules around auto calculating retrospective values for mature stock, as well as not having some important immature and mature stock calculations, meaning that you had to make manual calculations to override the automated values, or risk having incorrect valuations.
Now, you can trust that our calculations are more detailed and compliant, and therefore more accurate, without having to use a spreadsheet to manually calculate the values.
So rest assured, knowing that your NSC valuations will be calculated more accurately within Figured, saving you valuable time that you can spend on more meaningful conversations with your clients.
Reach out to us at firstname.lastname@example.org, or message us via the green chat bubble in the bottom right corner of your in-app screen.