Commentary on Sections Overview Overview Section 115: Addition of animals to herd
470.This section sets out the treatment of additions to the herd. It is based on paragraph 3(2) and (3) of Schedule 5 to ICTA.
471.Subsection (1) makes clear that there is a difference between additions, to which this section applies, and replacements dealt with in section 116.
472.Subsection (2) prevents a deduction for the cost of the additional animal. It is a similar rule to section 114(1) and is also based on paragraph 3(2) of Schedule 5 to ICTA.
473.Subsections (3) and (4) deal with the case in which the additional animal was part of the trading stock immediately before it became part of the herd. Subsection (3) requires the farmer to add an amount called “the balancing amount” to his or her trade receipts. The balancing amount is defined in subsection (4) and is intended to recover the costs that will already have been allowed as a trading expense.