ASC

ASC 310-905

Agriculture

310 Receivables

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In brief

IntermediateRecognitionSubsequent measurementIndustry-specific

ASC 310-905 provides industry-specific guidance on receivables (loans, notes, and others) for agricultural entities, with dedicated Cooperatives—Patrons Subsections for patrons of agricultural cooperatives. Its core rules govern when a patron recognizes a patronage refund receivable and how a patron's unbilled receivable from products delivered to a cooperative is subsequently measured. Scope follows ASC 905-10-15.

Key points (7)
  • Patrons recognize patronage refunds either when the related patronage occurs—if it is probable that a refund will be declared, confirming future events are expected, the amount is reasonably estimable, and the accrual can be made consistently year to year—or on notification by the distributing cooperative (310-905-25-3).
  • Any accrual of a patronage refund must be based on the latest available reliable information (310-905-25-3).
  • The accrual for patronage refunds is adjusted upon notification of an allocation by the cooperative (310-905-35-3).
  • If indications exist that expected net proceeds will be less than cost, the patron's unbilled receivable is recorded at estimated net realizable value (310-905-35-1).
  • Variances from the amount recorded as an unbilled receivable are recognized when reasonably determinable (310-905-35-1).
  • Advances from a cooperative are financing devices treated as reductions of the patron's unbilled receivable and are not used as amounts for recording sales (310-905-35-2).
  • Scope mirrors the Overall Agriculture Subtopic, with separate scope for the Cooperatives—Patrons Subsections (310-905-15-1; 310-905-15-2); certain recognition paragraphs were superseded by ASU 2014-09.

For students. Exam traps here are (1) treating cooperative advances as sales revenue rather than reductions of the unbilled receivable, and (2) forgetting that a patron may accrue a patronage refund before notification only if all four conditions in 310-905-25-3(a) are met. Note that ASU 2014-09 superseded the old revenue-recognition paragraphs, so revenue questions go to ASC 606.

patronage refundagricultural cooperativepatronunbilled receivablenet realizable valueadvances as financing deviceprobable and reasonably estimable accrual

Machine-generated study aid for ASC 310-905. Check the source paragraphs below.

310-905-00Status

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310-905-05Overview and Background

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310-905-05-1
This Subtopic addresses accounting for receivables, including loans, notes, and others, for entities in the agricultural industry. The guidance for accounting for patrons of agricultural cooperatives is presented in the Cooperatives—Patrons Subsections.

Cooperatives—Patrons

310-905-05-2
The Cooperatives—Patrons Subsections address accounting for receivables, including loans, notes, and others, for patrons of agricultural cooperatives.

310-905-15Scope and Scope Exceptions

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Overall Guidance

310-905-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the General Subsection of Section 905-10-15.

Cooperatives—Patrons

310-905-15-2
The Cooperatives—Patrons Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the Cooperatives—Patrons Subsection of Section 905-10-15.

310-905-25Recognition

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Cooperatives—Patrons

Patronage Refunds

310-905-25-3
Patrons shall recognize patronage refunds on either of the following occasions:
  1. a
    When the related patronage occurs if all of the following are probable:
    1. 1
      A patronage refund applicable to the period will be declared.
    2. 2
      One or more future events confirming the receipt of a patronage refund are expected to occur.
    3. 3
      The amount of the refund can be reasonably estimated.
    4. 4
      The accrual can be consistently made from year to year.
  2. b
    On notification by the distributing agricultural cooperative.
The accrual shall be based on the latest available reliable information.

310-905-35Subsequent Measurement

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Cooperatives—Patrons

Deliveries to Marketing Cooperatives

310-905-35-1
If there are indications that the expected net proceeds will be less than cost, the patron's unbilled receivable shall be recorded at estimated net realizable value. Variances from the amount recorded as an unbilled receivable shall be recognized when reasonably determinable.

Advances

310-905-35-2
Advances are financing devices and shall be treated as reductions in the patron's unbilled receivable and shall not be used as amounts for recording sales.

Patronage Refunds

310-905-35-3
The accrual for patronage refunds shall be adjusted on notification of an allocation by the cooperative.

Related subtopics