Lost sheep written off

The financial controller (note, not an accountant) had just finished reading the bedtime stories of Cinderella and Little Bo Peep to his young son. The child was particularly animated when listening to the part where the pumpkin turns into a golden coach and was also wide-eyed over the dilemma of the lost sheep. As father clicks off the bedside light and tiptoes, a sleepy voice is heard: "Daddy, when assessed as a golden coach, the pumpkin clearly has an enhanced book value. Would that asset appreciation, assuming a continuance of the status quo, be correctly classified as income or should it perhaps come into the category of long-term capital gain? And would it be valid to assess the lost sheep as tax deductible?" "Debatable son, but I like your thinking. . . ."