Corporate year end - The Combine Forum

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post #1 of 12 (permalink) Old 01-08-2017, 04:18 PM Thread Starter
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Corporate year end

Trying to decide if I should keep my year end Dec.31 or change it to another time of the year. What does everyone else use and why? Looking for some food for thought on the subject.

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post #2 of 12 (permalink) Old 01-08-2017, 04:50 PM
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Location? I know in Manitoba some accountants seem to struggle with the various farm programs when your year end is in July. For example the grain you harvest in the fall is offset by your expenses the following spring not the current spring where your crop input expenses occurred. If you don't seed the following spring your expenses are low and things can get out of whack. This also increases the wait time if you are going to trigger a payment. I'm curious to hear if other grain producers in the prairie provinces have year ends other than Dec. 31.

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post #3 of 12 (permalink) Old 01-08-2017, 05:01 PM
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I'm running a Jan 31st year end, the idea behind this is that you could pay salary for a full year to yourself on Dec 31 and on Jan 31 and company could claim 2 years expense in the same year. If I were to do it again I would use a Dec 31 year end as the government and other companies all send out year end statements or info slips based on a normal year end. FCC is the only one I know that will send a statement based on what ever year end you have.
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post #4 of 12 (permalink) Old 01-08-2017, 05:07 PM
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I worked at a bank and was a "farm lender" dealt with probably 100 farms, 98 had year ends oct 31, nov 30, dec 31, Jan 31.

2 had year ends in July... bad part is when the bank does there margin requirements it's at year end. Well guess what farmer has a good looking balance sheet in July no one.

My corp had a nov 30 year end, MNP suggested that we change it back to dec 31 along with all the other related parties on the farm.
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post #5 of 12 (permalink) Old 01-08-2017, 05:32 PM
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Ours is March 31. Only reason is that when Dad started farming, he figured that he would have his grain from last year sold by then to pay the input bills.

However, now we generally do our NH3, and some granular, fert in the fall. Also carrying crop past Mar 31. So sales and expenses don't match the "year-end".

That's why we use accrual.

It's not a good year-end to have for the government programs though. ie: We've been done our 2016 year-end for 9 months, but most farms are just getting into their 2016 year-end. So most of the farm programs don't have final details worked out until well past our year-end.

The other issue we run into is that with our year-end being March 31, and you need to have your April bank statement to take to the accountant, so we are walking in their doors the start of May. Hmmm.... what other major time period just ended for accountants and they are now taking time-off due to overtime??? Then we hit June-Sept when staff are taking holidays. Seems to take a lot of unneeded phone calls to get them moving sometimes.

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post #6 of 12 (permalink) Old 01-08-2017, 06:05 PM
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We use Dec 31 and would not change that. All the other dates have never made any sense to me.
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post #7 of 12 (permalink) Old 01-08-2017, 07:37 PM
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Quote:
Originally Posted by TotaledmyGN View Post
when your year end is in July. This also increases the wait time if you are going to trigger a payment.
I can vouch for that, although since Agristability got cut I don't see any farm programs kicking in ever again(which I am totally fine with).

So ours is July 31 which I think works best for a grain farm, other than a bit of running around at the end of July to make sure all accounts are zeroed out.

Having separate dates for corporate and personal year ends gives you more flexibility on moving money around to manage taxes. Using the "optional Inventory" is another little tool.
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post #8 of 12 (permalink) Old 01-08-2017, 07:41 PM
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The farm's year end is Dec. 31, but I work with a group that relies on Gov't grants so we set it to March 31 to coincide with the programs. The problem with that is that all your accounting etc. for year ends gets carried into a busier part of the year, and anyone expecting the accounting to match a "normal" Dec. 31 is going to be confused. Be aware that there can be limits on how many times you switch, so if you don't like it, switching back might be difficult to do. I'll be leaving my farm year end at Dec. 31.
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post #9 of 12 (permalink) Old 01-08-2017, 09:15 PM
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Have one that June 30 and it a struggle. If I were doing it again would be Nov 30 as would sync better with afsc paperwork and think it simpler.
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post #10 of 12 (permalink) Old 01-08-2017, 10:45 PM
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Quote:
Originally Posted by CM View Post
Trying to decide if I should keep my year end Dec.31 or change it to another time of the year. What does everyone else use and why? Looking for some food for thought on the subject.
Dec 31. Doesn't really matter what time of year it is, but its nice to do personal corp and T5013 all at once. Its a great year end for farming, i think anyways.

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