Q.1
Agricultural Economics- ICAR JRF/SRF 2024 (Q.31)
MCQ (Single Correct)
+4
−1
Which of the following methods of depreciation is suitable for farm animals?
EXPLANATION
Farm Management Principles: Factor-Product, Factor-Factor, Product-Product & Cost Concepts (A1, A2, B, C)
- Depreciation Methods for Farm Animals (Livestock):
- Annual Revaluation Method (Inventory Method): Farm animals (work bullocks, dairy cattle, breeding stock) undergo biological appreciation during their early growth and peak lactation/working years, followed by progressive biological wear and tear, senescence, and depreciation. Standard mechanistic mathematical formulas cannot capture these biological fluctuations or veterinary health status. Therefore, livestock are inspected and valued annually at prevailing market prices minus necessary aging discounts, making annual revaluation the most scientifically accurate method.
- Distractors:
- Straight Line Method: Assumes constant annual wear and tear ($D = \frac{C - S}{N}$), suitable for inanimate implements, buildings, and irrigation wells.
- Sum-of-the-Years'-Digits (SYD) & Diminishing Balance Methods: Accelerated depreciation methods where higher write-offs occur in early asset life, ideal for tractors and computerized farm machinery.
Correct option: (3) Annual revaluation method
Explanation not matching this question?
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