Quote:
Originally Posted by disneysteve
I don't know the first thing about farming, but I just found this statement very funny. I'm sure it is a perfectly normal concept for those in the industry, but for the rest of us, it creates all kinds of images in my mind. I just picture a USED COW lot somewhere with some guy with slicked back hair and a plaid sportcoat trying to sell depreciated cows. Hey, this one was only milked on Sundays by a little old lady.
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lol! Though, wouldn't it be a plaid cowboy hat?
Actually, the purpose for depreciating the cows is exactly the same as being able to depreciate anything else...as they get older, they are worth less. As they get older, they are more likely to miss having a calf one year, they are one year closer to getting sick or dying, they produce less milk so the calves they have won't grow as big, etc. Eventually, you either sell them or they die. If you sell them and have depreciated the amount you bought them for, it is considered income. If they die, you lose out on anything you could have sold them for.