Feed Lot

APR 2013

Feedlots and cow/calf operations in the beef industry who feed 500 or more has annually on grains and concentrates; maintain 500 or more beef cows; backgrounder, stocker/grower, preconditioner; veterinarian, nutritionist, consultant

Issue link: https://feedlotmagazine.epubxp.com/i/119569

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accrual method of accounting for sales and purchases must be used. Obviously, there is no ���right��� accounting method for all businesses. However, certain businesses may prefer one over the other depending on the following factors: ��� Business Size: Smaller businesses may prefer cash accounting because it���s simpler and requires less bookkeeping. Businesses often switch to accrual accounting as their businesses grow to more accurately reflect their revenue and expenses. ��� Tax Deductions: Cash or accrual accounting may be more beneficial when filing taxes. ��� Internal Accounting: Using the same accounting method internally and for tax purposes simplifies the accounting process. However, the IRS does allow a different method for internal accounting use and tax accounting. Every cattle busine ss chooses its accounting method when the first ALANCE tax return is filed. HEET Once an accounting method has been selected it is usually necessary to INCOME receive the approv a l of the REVENUE IRS before changing that me thod. The IRS���s Form 3115, Applic ation for NAGEMENT Change in Accounting Method, is used to request a change in an overall accounting method as well as the accounting treatment of any item of income or expense. Ideally, all feedlot operators would opt for an accounting method that showed the business���s real-time financial health. Until now however, the complexity of accrual accounting has dissuaded many cattlemen from adopting it. What is the best accounting method for your feedlot FL operation? Consider this: Business Size ��� Smaller businesses may prefer cash accounting because it���s simpler and requires less bookkeeping. Tax Deductions ��� Decide which is more beneficial when filing taxes Internal Accounting ��� Do you use the same system internally as for tax purposes? Circle No. 109 on Reply FEED���LOT April/May 2013 11

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