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HMRC internal manual

Business Income Manual

Farming: stock valuation: unexhausted manures

After a crop has been harvested some of the fertiliser which was applied when it was growing may remain in the soil and be available to subsequent crops. Similarly fertiliser or manure applied to pasture may not have been fully used at an accounting date. The value of such unused manure or fertiliser is referred to as unexhausted manurial value or residual manurial value. The actual grass in a pasture also has a value known as sod value. Such values are usually included in tenant right valuations (see BIM55245) when farms change hands. Such values may be included in stock valuations but including them is not compulsory. Either treatment is acceptable if applied consistently.

The Central Association of Agricultural Valuers and the Royal Institution of Chartered Surveyors recommend that, in new cases, these items should be consigned to the balance sheet in the first accounts with no charge to profit and loss and not adjusted for in subsequent years. On cessation the difference between the closing and opening figures should be taken to profit and loss. This method is acceptable if it is consistently used.