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Valuation and Depreciation of Farm Assets

Valuation and Depreciation of Farm Assets
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Copyright: 2018
Pages: 12
Source title: Agricultural Finance and Opportunities for Investment and Expansion
Source Author(s)/Editor(s): Augustine Odinakachukwu Ejiogu (Imo State University, Nigeria)
DOI: 10.4018/978-1-5225-3059-6.ch011

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Abstract

Assets, especially fixed assets, are obtained at a cost and are used in the course of more than one production period. In line with the method of acquisition of the relevant asset, the need arises that their accurate values are appropriately spread over the lifetime of the asset in question and over the relevant production period. It is against this background that this chapter is devoted to highlighting the concept of asset valuation. The discussions are based on a review of relevant literature. It is concluded that the realistic valuation of assets involved in a farm enterprise is essential in ensuring that enterprise is a going concern. It is recommended that relevant contributions of the farm assets including hoes, machetes, head pans, wheelbarrows, and all should be meticulously and rigorously factored into the costs and returns of the production cycles to give a complete idea of the enterprise as a going concern. Furthermore, farm asset such as land that appreciates in value should be realistically incorporated in the valuation of the production in the farm venture.

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