2. Inventories of Non-Current Assets Page 20

3. Page 20 is completed on beginning and ending dates of the record book.

4. Page 20 is for entering opening and closing inventories of Non-Current Assets.

5. What is an ASSET? Any item you own that has value is an asset. For your record book, an asset is any part of the business necessary to conduct the SAEP. Any asset on hand at the end of the year AND placed in the closing inventory is considered PRODUCTIVELY INVESTED.

6. Definition of Non-Current Asset Example: -Beef cow for calf production. -A tractor used for crop production

7. What is an INVENTORY? Answer: An inventory is an itemized list of all assets on hand on a specific date. A normal inventory usually includes a description of the item(s) on hand and the quantity of each item. For the purpose of a January-December record book: List your SAEP assets on hand at the beginning and then at the end of the record book year. Use two dates: January 1 and December 31 of each year. Beginning students use date entered ag class.

8. Sample Inventory (Using Microsoft Excel)

9. Depreciable Asset An example of a DEPRECIABLE item is a tractor. A tractor loses value with each year that passes and with the wear from use. After 10 years, the tractor is no longer worth its acquisition cost (amount initially paid for it). Here’s an easy way to make sense of why non-current items depreciate. You don’t want to buy something used because it isn’t as good as something brand new. The same applies to agricultural equipment, buildings, and breeding animals. After you use them, they no longer are as valuable as they were when new. Depreciation is the decline in the value of a non-current item because of time and/or wear and tear.

10. Go to page 20, click “Select a Schedule,” and review the last FIVE schedules. Non-current assets will fit into these schedules.

11. Items to Enter in each Schedule 1 st : Select the enterprise to which the inventory asset pertains. 2 nd : Provide a description of the asset. 3 rd : For the Beginning Date or Ending Date column, enter the quantity and unit. 4 th : Enter the value of the asset at the inventory date. For Sections F-H only: Enter the amount of depreciation, if any.

12. Example for Schedule F

13. Beginning Date versus Ending Date If you have an asset on hand at the beginning of the year, then the value and quantity go under the Beginning Date. If you obtained the asset sometime during the year and it is on hand at the end of the year, then enter the closing value and quantity under Ending Date.

14. Beginning Date versus Ending Date EXAMPLE: In September you purchased a new tractor to use on your farm. This would be listed as an asset under “Investments in depreciable machinery, equipment, and fixtures” in the column for Ending Date come December 31. You will also list the tractor in the Beginning Date column for January 1 of the new year.

15. For first year students, the beginning date may be the first day they enroll in the ag class. For graduating students or students leaving the agriculture program, the ending date may be the last day they are enrolled in the ag class. Beginning Date versus Ending Date

16. The fifth schedule is for non-depreciable (raised or grown) draft, pleasure, or breeding animals. Example: You own a herd of Brangus cattle for breeding purposes. The cattle are often let out to graze. Your horses are used to bring the cattle in from the pasture daily. The horses are for draft or work purposes. The cost of upkeep of the horses is added to the beginning value of the horses for an Ending value. NOTE: In this case, the horses were not purchased. They are non- depreciable because you raised them as offspring from your other horses.

17. Schedule F is for depreciable (purchased) draft, pleasure, or breeding animals. Example: If you bought the horses used to bring the herd of cattle in from the pasture, then the horses would be depreciable. They are still draft horses, but you did not raise them as offspring from your other horses.

18. Schedule G is for depreciable machinery, equipment, and fixtures. Example: You purchased a tractor for planting and harvesting the corn crop in the SAEP. The tractor cost $10,000.00. However, after being used for a year, the tractor is no longer worth its acquisition cost. You calculate the tractor’s worth on the Ending Date by determining how much it depreciated during the record book year.

19. Schedule H is for depreciable land improvements, building, and fences. Example: You wanted to keep your herd of cattle out of your corn field. You purchased 10 rolls of barbed wire to repair a fence. Because the wire will not last forever, it is a depreciable asset.

20. The last schedule is for land. Example: You own 50 acres of land used to grow corn. The value of the land is entered on the beginning date and ending date for each year. Land does not lose its value; only those improvements on the land do. Therefore, the land value on the Ending Date will be the same as the land value on the Beginning Date.

21. If you have questions about inventories...... always check the “section instructions” if you are confused about what needs to be entered.... ask your agriscience teacher for help.