Livestock Calculations

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Compare NAMV and NSC livestock valuation methods to see which suits your tax and farm management strategy.

FINANCIAL LITERACY  •  18 AUGUST 2025  •  4 MIN READ

Understand New Zealand’s NAMV (Herd Scheme) and NSC livestock valuation methods. Learn the tax impacts, record-keeping demands, and which suits your farming goals.

NAMV vs NSC: Choosing the Right Livestock Valuation Method

When it comes to valuing livestock for end-of-year financial reporting and tax purposes, New Zealand farmers can choose from two main methods - National Average Market Value (NAMV, or sometimes called herd scheme) or National Standard Cost (NSC).

Each method has its own implications for tax, reporting, and long-term planning, so it’s important to understand the key aspects of each and how they might impact your farm’s financial position.

National Average Market Value / Herd Scheme

The NAMV (or herd scheme) is a valuation method based on the average market value of livestock as determined by Inland Revenue each year. These figures reflect actual market data and are published annually (in May) for different classes and categories of livestock.

1. Livestock is valued at the market average
Each year, the IRD sets the national average market value based on a survey throughout New Zealand at 30 April. Using this method, your livestock is valued based on these set rates, not the actual amount you paid or received for each animal.

2. Livestock is treated as a capital asset
Livestock is treated like an investment. Changes in value from year to year aren’t taxable or deductible unless you sell or dispose of the animals. 

3. Tax-free natural increase in herd numbers
Any animals bred on your farm (i.e. a natural increase) are added to the scheme at the NAMV, but you don’t pay any tax when they’re introduced*. You only pay income tax when you sell the animals for more than the recorded value.

*When you first elect into the herd scheme, your current livestock is revalued from its existing book value to the NAMV. If the NAMV is higher, the difference is treated as taxable income in the year you enter the scheme.

4. Simple record-keeping
Once livestock is in this scheme, you don’t have to track individual animal costs or production expenses for valuation purposes. This makes the end-of-year accounting processes simpler.

5. Generally considered a long-term decision
Once you’ve chosen to use this method for a livestock class, the animals in that class are required to remain in this scheme. This provides consistency in how they’re valued.

The NAMV method is best suited to farmers:

Wanting more consistent and less volatile year-end results

With the National Standard Cost (NSC) method, homebred animals are given the standard cost rates set annually by Inland Revenue for their class and age. If you’ve bought in young stock, they start off at their purchase price, and each year you add the published breeding, rearing and growing (BRG) costs as they move up through the classes. Once they hit the mature breeding stage, those annual additions stop and their value is locked in at the accumulated cost. That fixed cost then stays with the animal until it eventually leaves the herd.

1. Livestock is valued based on cost, not market prices
Each year the IRD sets the national standard cost based on what it typically takes to raise an animal to maturity. Once livestock reaches maturity, each animal holds its cost until sold or disposed of.

2. Livestock is treated as a trading stock
Livestock is treated similar to inventory. Changes in numbers and value from year to year are taxable/deductible, which can impact your profit.

3. Volatility
Because changes in livestock numbers and value are recognised as taxable income or deductions each year, your profit (and tax) can swing more than the NAMV method, especially if you have large numbers of mature or trading stock.

4. Can be used for more livestock classes
The NSC method can be used for livestock classes that aren’t part of the NAMV method like lambs, bobby calves or other young animals.

5. More admin
There is more detailed record-keeping involved in this method as you have to track costs and stock changes more carefully.

The NSC method is best suited to farmers:

Managing early-stage livestock that aren’t eligible for the NAMV method

Wanting to maximise deductible expenses (such as decreases in livestock value)

Herd Scheme vs National Standard Cost comparison

Choosing between National Average Market Value and National Standard Cost is a strategic decision that depends on your farming operation and goals.

The best option will depend on how you run your farm, how long you hold your livestock, your cash flow needs, and what you want to achieve (whether that’s building long-term value, managing short-term profits or planning for succession).

Your accountant can help assess which method aligns with your business model and goals, and ensure you’re taking a tax-efficient approach that works now and for the future.

If you're not working with an accountant or looking to switch, consider Beany. Our team work fully online from all over New Zealand, giving you access to local experts without needing to leave the farm. Book a call with us to discuss your farming business and explore how we can support your accounting requirements.

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Business advice

A step-by-step guide to creating a cash flow forecast with an example layout and tips for reading the results.

FINANCIAL LITERACY  •  16 JULY 2025  •  3 MIN READ

A step-by-step guide to creating a cash flow forecast, with an example layout and practical tips for reading and adjusting your forecast.

How to Create a Cash Flow Forecast

Making a cash flow forecast can be complicated, but it’s an invaluable tool for business planning and decision-making.

A simple forecast can give you a clear picture of what’s coming in and going out of your business and help avoid cash crunches before they happen.

While you can build one yourself (and we’ll guide you through how), if you’d rather have someone do it for you, an accountant is a huge help.

What you’ll need to prepare your forecast

Before we get started, you’ll need to gather the following information:

Your bank statements or accounting reports

Expected sales or income (including timing of payments)

A list of regular expenses (wages, rent, subscriptions)

Any one-off or seasonal expenses (e.g. insurance renewals)

Planned purchases, loan repayments, tax obligations, or hiring of staff

Steps to creating your cash flow forecast

Think about how far ahead you want to forecast. If this is your first time, it could be helpful to start small and forecast for the next 3-6 months. A 12-month period is great for accounting for any seasonality across a calendar year.

Pick a timeframe that suits your business and your cash flow rhythm.

Step 2: Run a historical cash flow report in your accounting software

To make forecasting easier, it’s best to start with actual data. Run a report that shows past cash movement in your business, broken down by month. 

Please note: the report name will vary by software, but will be something like Cash Summary or Cash Flow Statement.

If you use Xero, run the Cash Summary report with a monthly date range and compare with the last 12 months (under the ‘Compare with’ drop-down select ‘Enter a Different Number’ and then enter 12).

Step 3: Map out your expected cash inflows

Create a spreadsheet and list out the different forms of cash your business expects to receive during your forecast period (i.e. money coming into the business).

Add a summary row that calculates the total inflow (or ‘money in’).

Reference the historical data for insight into the type of cash inflows that the business has had previously, and use it as a guide for estimating future inflow amounts (and the timing of these).

Step 4: Map out your expected cash outflows

Underneath your list of inflows, list out all your payments that go out of the business.

Drawings or dividends to the owners/shareholders

Add a summary row that calculates the total outflow (or ‘money out’).

Reference the historical data for building out this list. For consistency, copy your expense categories into your forecast spreadsheet and then add any other cash outflows that the business has or is likely to have.

Now that you’ve listed out what money you predict is coming in and going out, you can bring it all together.

Net cash flow = total inflow minus total outflow (i.e. money in - money out)

Closing bank balance for each month (opening balance + net cash flow)

*For month one, the opening balance should be the expected bank balance for the start of the forecast period. The closing balance of month one becomes the opening balance for the second month and so on.

The above example is purely for informational and layout purposes only. The figures are entirely made up and are not based on any real business entity.

Have a look at your numbers. Do your income estimates look realistic? Have you missed any irregular or seasonal revenue or costs? Have you over- or under-estimated how long payments will take?

It pays to double-check you haven’t missed anything.

It’s also useful to test different scenarios, planning for the ‘what ifs’ of running a business.

Read our other cash flow forecasting article for some scenario planning examples and more details on what makes a good forecast.

Reading the results - what does your closing cash balance show you?

If your formulas are working correctly, changes to any figures will flow through to your forecasted closing cash balance.

The monthly closing cash balance may indicate that you need additional money. Will you go into overdraft (with high interest rates) or need to find another funding source?

In this scenario, talking to your accountant for options that are right for you can be helpful.

Too many periods of negative cash flow could cause trouble. What forward planning can you do to make sure you'll have enough cash to meet your everyday business needs?

Is there a build up of cash? What could you do with it? Upgrade assets, wage increases, pay off debt, put it aside for tax or savings?

What would happen if you brought forward or pushed back the date you purchase an asset? What would happen if you add a new employee to your team? 

Making decisions around the timing of certain inflows and outflows can make a big difference.

A forecast is most useful when it's reviewed and updated regularly.

It can be helpful to incorporate cash flow forecasting into your internal planning and strategy processes so that it becomes a standard operational task.

These days there are tools that can help, from forecasting apps to a simple spreadsheet template.

If it sounds too complicated or you’d rather have a professional look over your numbers, there is a lot of value in having an accountant create a cash flow forecast for you.

Make sure you haven’t missed any hidden or seasonal costs

Align your forecast with upcoming tax payments or other compliance deadlines

Suggest ways to improve your cash position or navigate tight spots

Think of it like this. You’re the expert in your business, and your accountant is there to help you understand what the numbers are really saying and keep things on track.

Financial literacy

Understand what cashflow forecasting is, why it matters, and how to get it right.

FINANCIAL LITERACY  •  14 JULY 2025  •  5 MIN READ

Understand what cashflow forecasting is, why it matters, and how to get it right. Includes forecasting methods, tools, and how to use your forecast effectively.

Cashflow Forecasting Explained: How to Plan with Confidence

A cash flow forecast is a tool that helps you predict all cash movements in and out of your bank account over a set period of time.

It gives you visibility over when you might have cash available or when you might run short, by factoring in expected revenue, expenses and other financial activities.

In this guide, we'll cover the importance of forecasting and how to use your cash flow forecast to make business decisions.

It’s often easy to confuse cash flow with profit, but they’re not the same.

Profit is the difference between income and expenses, where cash flow is all about the timing of when cash actually enters and leaves your bank account.

If cash isn’t coming in at the right time or large bills are all due at once, even profitable businesses can run into trouble.

This is where a cashflow forecast is invaluable. 

A cash flow forecast records ALL money coming in and going out of your business, so it includes transactions that won’t be on a Profit and Loss (P&L) statement such as buying assets, repaying a loan, and paying taxes.

The pros and cons of cash flow forecasting

Cash flow is the lifeblood of the business. 

Having a clear forecast of when money is expected to flow in and out of your business gives you the ability to plan confidently even when the unexpected happens.

Like anything, there are always advantages and limitations.

Confidently assess whether you can afford new hires, equipment or investments

Identify periods where cash might run low and be prepared for it

Manage seasonality (highs and lows) with confidence

Secure funding - a forecast can strengthen your case when applying for loans or investment (it can even be a requirement for some banks)

Cash flow forecasts will almost certainly turn out wrong every year in some way. I’d bet that no business person has ever got to the end of the year and compared actual results to their forecast and thought ‘well done, a perfect match’.

The fact is life happens. Things can change that affect cash flow. The process of planning is far more important than the plan itself. The key is to treat it as a working tool, not a fixed plan.  You can update your cash flow forecast as the year progresses so you're prepared for these changes. Often having different scenarios can be helpful so you can see how your cash flow movements change under different circumstances and be well informed.

Depending on your level of skill, and the time and energy you have, there are three ways to prepare a forecast.

Go it alone - access the steps in our article on creating a cash flow forecast.

Lean on software - you can find cash flow forecasting software that links to your accounting software to cut down on manual data entry.

Get a professional to do it - this is a low-fuss way, but you should still be involved in the process by thinking through different scenarios and understanding what drives your business 

This forecast is for informational purposes only. The figures used are entirely made up and not at all reflective of a real business.

Effective forecasting isn’t just about plugging numbers into a spreadsheet.

Uses realistic assumptions and data based on past trends and future plans

Includes timing. Not just how much money, but when it comes in or goes out

Can be updated easily to reflect changes in your business

Is relevant to your business sales cycles, payment terms and seasonality

Factors in different scenarios so you’re prepared for the ‘what-ifs’ (keep reading for some examples)

Ultimately, a good forecast helps you make better decisions.

Once you have a cash flow forecast, you don’t just leave it there.

What is it telling you? What do you need to consider? What happens if you change something in the forecast?

Are there any months where your bank account is negative? - talk to your tax advisor to come up with the best solution for you to combat this.

Are there months with a surplus of cash? - You could pay down loans which don’t have an early-repayment penalty and set money aside for income tax, GST, and PAYE. Or save it for future months that are not cash flow positive.

Do you end the year with a cash surplus? - You could consider upgrading your assets or investing/saving the cash.

There can be a lot of ‘what ifs’ when it comes to running a business.

Play with the timing and amounts on your forecast to see how different scenarios impact your cash flow (tip: make a copy so you can still access the original).

Shutdown periods (e.g. over Christmas/New Year)

Comparing your forecast to actual cash flow movement

Xero (and other software providers) make it easy to see your actual cash inflows and outflows each month. 

Compare your forecast against actual figures.​

Remember that you can always revise the forecast. The numbers aren’t fixed. The assumptions aren’t permanent. You’ll find yourself continually updating the forecast and in time, your forecast will more closely reflect actual cash movements.

As your business changes, keep your forecast up to date so you always know what’s ahead. It can be helpful to tie it into your broader planning like budgeting, funding decisions and business strategy.

Cash flow forecasting doesn’t need to be complicated, but if you’re not sure where to start, it’s worth getting an accountant to assist.

At Beany, our team of accountants are passionate about helping business owners make smart decisions for their business (and life).

While our accounting package covers annual compliance, we can also help clients with anything else accounting-related such as creating tailored cash flow forecasts that are easy to understand and update. Whether you need a one-off forecast for a funding application or ongoing visibility to support your growth plans.

Get in touch to find out how we can help with your business’s accounting and compliance, and build a forecast that gives you confidence in your cash position and your future plans.

Investment Boost is a new tax deduction aiming to stimulate the economy. Learn how it works and what qualifies.

EXPENSES  •  11 JULY 2025  •  1 MIN READ

Investment Boost lets New Zealand businesses claim 20% of the cost of new assets upfront. See how it works, what qualifies, and how to claim it in your tax return.

Investment Boost: New 20% Tax Deduction for Business Assets

Investment Boost is a new deduction for New Zealand businesses, designed to encourage productivity and economic growth.

The deduction allows businesses to immediately claim 20% of the cost of new assets, on top of standard depreciation.

If your business is planning to invest in capital assets, this new rule could mean a significant tax saving in the year you make the purchase.

When you buy an eligible asset for your business, you can claim 20% of the cost as a one-off deduction in your income tax return for that financial year. After that, you continue to depreciate the remaining value as usual.

This means you’re still claiming the cost of the asset over its useful life, but with a larger deduction upfront in the year it was purchased.

If you buy an asset for $10,000 and it will be depreciated over 5 years the difference with claiming costs over the asset's useful life is as follows:

With Investment Boost: $3,600 is claimed in year one (20% + depreciation), and $1,600 each year after that.

Without Investment Boost: you’d claim $2,000 per year using the straight-line depreciation method

The overall deduction is the same over the 5-year period, but you get more of the deduction earlier, improving cashflow and reducing your tax bill in the year you invest in the asset.

To qualify for Investment Boost, the asset must be:

available for business use on or after 22 May 2025, and

Common examples include machinery, equipment, and work vehicles.

Investment Boost also applies to buying new commercial and industrial property (that don’t allow depreciation deductions), improvements to depreciable property (not residential), primary sector land improvements, mixed-use assets, and certain petroleum and mineral mining development assets.

There’s no cap on what can be claimed. You can claim Investment Boost on any number of qualifying assets, regardless of their value.

Second-hand Assets - Assets that have previously been used in New Zealand

Residential buildings (including rental properties)

Fixed life intangible assets (such as patents)

Assets that are fully expensed under other rules (such as low-cost assets under $1000 that are fully deductible in the year of purchase)

Investment Boost will be calculated and deducted by your accountant in your income tax return in the year in which the asset was purchased (or the building constructed in the case of commercial/industrial buildings).

If you later sell the asset for more than its adjusted tax value, you may need to declare the gain as taxable income (primary sector land improvements excluded).

For more information, check out the IRD’s Investment Boost Fact Sheet or discuss any planned asset purchases with your accountant to see how this deduction could apply to your business.

Investment Boost - the new tax deduction for businesses

Expenses

Learn how depreciation works, why it matters, and how it affects your tax, asset values, and financial reporting.

FINANCIAL LITERACY  •  11 JULY 2025  •  7 MIN READ

Learn how depreciation works, why it matters, and how it affects your tax, asset values, and financial reporting. Simple insights for New Zealand business owners.

What Is Depreciation? A Guide for NZ Business Owners

As a New Zealand business owner you’ll often buy assets to help run your business. For example, a laptop, car, office furniture, and machinery. These things all cost significant sums of money. While they’re all vital for your business operations, their value isn’t static. Over time they wear out, become obsolete, lose their original worth or get replaced.

In simple terms, depreciation is an accounting method that allows businesses to spread the cost of an asset over a period of time (also known as ‘its effective life’).

Instead of claiming the full cost of the asset as a deductible expense in the year it was purchased, you claim a portion of the cost each year based on its estimated lifespan.

For example, if you bought a piece of machinery for $50,000 and it’s expected to last 10 years, you might claim $5,000 each year for 10 years, rather than claiming $50,000 in 1 year.

Depreciation helps acknowledge that your assets contribute to your business’s income over its entire lifespan rather than only in the year it was purchased.

Depreciation might feel like just another technical term, but it's very useful in the world of business.

Reasons include: tax deductions, knowing the real value of assets, better reporting, asset management and planning.

This is often the most compelling reason for business owners to understand depreciation. In New Zealand, the cost of most depreciating assets is tax-deductible over their effective life. 

Of course, a lower taxable income often translates to a lower tax bill, freeing up cash for other essential business activities. What business owner wouldn’t want that?

A car bought for $30,000 isn’t worth $30,000 forever. Depreciation helps track how much it's worth now, not just what you paid for it. 

This is also known as its book value, which is the original cost of the asset minus any accumulated depreciation. 

Total accumulated depreciation (over the last few years): $20,000

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