# ASC 325-905-05: Investments—Other — Agriculture — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/325/905/#05-overview-and-background) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:45:04.068Z to 2026-09-09T23:45:04.068Z Record version: sha256:88c1f262187b334449b9f8e9617aea2623cf6118f632d04e0a92b8851003142b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-905-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/325/905/#05-overview-and-background) SEC content: no ##### [325-905-05-1](https://asc.understandingaccounting.org/asc/325/905/#325-905-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:45:04.068Z to 2026-09-09T23:45:04.068Z Record version: sha256:4e7eaa647ef51432fa1bdbd86c87a2ae85c0a517dc083a3620a34f24074ee2cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses all other investments for entities in the agricultural industry. The guidance for accounting by different entities in the agricultural industry is presented in the following two Subsections: 1. a Cooperatives 2. b Cooperatives—[Patrons](https://asc.understandingaccounting.org/glossary/p/#patrons "Any individual, trust, estate, partnership, corporation, or agricultural cooperative with or for whom a cooperative does business on a cooperative basis, whether a member of an agricultural cooperative or nonmember of an agricultural cooperative."). ### Cooperatives ##### [325-905-05-2](https://asc.understandingaccounting.org/asc/325/905/#325-905-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:45:04.068Z to 2026-09-09T23:45:04.068Z Record version: sha256:38319d9d1620c7718eb5ce98f4de9117d84610febd0634cb4b26d9ea63e34ce3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives Subsections provide guidance for an [agricultural cooperative](https://asc.understandingaccounting.org/glossary/a/#agricultural-cooperative "The Agricultural Marketing Act of 1929 defines a cooperative association as any association in which farmers act together in processing, preparing for market, handling, and/or marketing the farm products of persons so engaged, and also means any association in which farmers act together in purchasing, testing, grading, processing, distributing, and/or furnishing farm supplies and/or farm business services. Provided, however, that such associations are operated for producers or purchasers and conform to one or both of the following requirements: No member of an agricultural cooperative association is allowed more than one vote because of the amount of stock or membership capital he may own therein. The association does not pay dividends on stock or membership capital in excess of 8 percent per year. In addition to meeting either of the requirements in this paragraph, the association shall not deal in farm products, farm supplies, and farm business services with or for nonmembers of an agricultural cooperative in an amount greater in value than the total amount of such business transacted by it with or for members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association.") if it holds investments in other cooperatives. ### Cooperatives—Patrons ##### [325-905-05-3](https://asc.understandingaccounting.org/asc/325/905/#325-905-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:45:04.068Z to 2026-09-09T23:45:04.068Z Record version: sha256:ee03be90efbdc53310606ec81e2d8c4a7826818a4fcfb215b475fca6248bd6a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives—[Patrons](https://asc.understandingaccounting.org/glossary/p/#patrons "Any individual, trust, estate, partnership, corporation, or agricultural cooperative with or for whom a cooperative does business on a cooperative basis, whether a member of an agricultural cooperative or nonmember of an agricultural cooperative.") Subsections provide guidance for a patron's investments in cooperatives. ##### [325-905-05-4](https://asc.understandingaccounting.org/asc/325/905/#325-905-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:45:04.068Z to 2026-09-09T23:45:04.068Z Record version: sha256:9aab67114c08209c7eb2ed3ff1baf81002d227682cc80f8056561f398cebf077 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Member patrons provide most of the capital required by [agricultural cooperatives](https://asc.understandingaccounting.org/glossary/a/#agricultural-cooperative "The Agricultural Marketing Act of 1929 defines a cooperative association as any association in which farmers act together in processing, preparing for market, handling, and/or marketing the farm products of persons so engaged, and also means any association in which farmers act together in purchasing, testing, grading, processing, distributing, and/or furnishing farm supplies and/or farm business services. Provided, however, that such associations are operated for producers or purchasers and conform to one or both of the following requirements: No member of an agricultural cooperative association is allowed more than one vote because of the amount of stock or membership capital he may own therein. The association does not pay dividends on stock or membership capital in excess of 8 percent per year. In addition to meeting either of the requirements in this paragraph, the association shall not deal in farm products, farm supplies, and farm business services with or for nonmembers of an agricultural cooperative in an amount greater in value than the total amount of such business transacted by it with or for members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association."). The capital usually represents long-term investments acquired through initial cash investments, [retains](https://asc.understandingaccounting.org/glossary/r/#retains "Amounts determined on a per-unit basis or as a percentage of patronage earnings that are withheld by cooperatives from distributions and allocated to patrons' capital accounts."), or noncash [patronage](https://asc.understandingaccounting.org/glossary/p/#patronage "The amount of business done with a cooperative by one of its patrons. Patronage is measured by either the quantity or value of commodities received from patrons by a marketing cooperative and the quantity or value of the goods and services sold to patrons by a supply cooperative.") allocations. Voting rights for those investments are usually based on one-member-one-vote or limited weighted voting rather than on the number or amount of securities or other evidence of equity ownership held. The significance of investments by patrons results primarily from the purchasing or marketing rights and participation in the operating earnings. The investments are made primarily to obtain an economical source of supply or marketing services and not on the expectation of a return on investment. Investments in cooperatives are not equity securities and usually are not readily marketable, and transfer or sale, other than back to the issuing cooperative, is usually restricted or prohibited. As such, the operations of cooperatives have many of the attributes of corporate joint ventures or partnerships.