{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/330/905/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"330","topic_title":"Inventory","subtopic":"330-905","subtopic_title":"Agriculture","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Growing Crops","paragraphs":[{"citation":"330-905-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_144F4280-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">All direct and indirect costs of growing <a href=\"/glossary/c/#crops\" class=\"term\" title=\"Grains, vegetables, fruits, berries, nuts, and fibers grown by agricultural producers.\"><span>crops</span></a> shall be accumulated </span></span><span class=\"sfragment\" id=\"sfr_144F440B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"> until the time of harvest. </span></span><span class=\"sfragment\" id=\"sfr_144F4589-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Some crop costs, such as soil preparation, are incurred before planting and shall be deferred and allocated to the <a href=\"/glossary/g/#growing-crop\" class=\"term\" title=\"A field, row, tree, bush, or vine crop before harvest.\"><span>growing crop</span></a>. </span></span></div></div>","snippet":"All direct and indirect costs of growing crops shall be accumulated until the time of harvest. Some crop costs, such as soil preparation, are incurred before planting and shall be deferred and allocated to the growing cr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:158c0eaa3cde029977c332c204b85f1844b68ed15e9a3b1fb031ed0dede42f55","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"citation":"330-905-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_144F46E5-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Other cultural practices, such as clearing the residue of harvested crops, cannot be performed or completed until after harvest, which may be in a succeeding year; those costs shall be estimated, accrued, and allocated to the <a href=\"/glossary/h/#harvested-crop\" class=\"term\" title=\"An agricultural product, gathered but unsold.\"><span>harvested crop</span></a>. </span></span><span class=\"sfragment\" id=\"sfr_144F4836-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Some crops require more than one year to mature, and the costs shall be deferred until harvest. </span></span></div></div>","snippet":"Other cultural practices, such as clearing the residue of harvested crops, cannot be performed or completed until after harvest, which may be in a succeeding year; those costs shall be estimated, accrued, and allocated t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:767b3ca0adb037990e93920f31bfb7b20daceab469322ac1686bdc38a8f447ec","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:600462ea5f7484a0904a553d89683cfbed0c631f93a52b3f9ff1890a4fd7e99b","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"block":null,"heading":"Production Animals","paragraphs":[{"citation":"330-905-25-3","para":"25-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_144F498B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Animals with short productive lives, such as poultry, may be classified as inventory. </span></span><span class=\"sfragment\" id=\"sfr_144F4AC3-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Due to the short productive life of poultry, the cost of flocks may be classified as inventory. </span></span><span class=\"sfragment\" id=\"sfr_144F4C0C-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The accounting principles for poultry operations are much the same as those for other <a href=\"/glossary/p/#production-animals\" class=\"term\" title=\"Production animals provide a service or primary product other than their progeny. Examples are dairy cows (milk), poultry (meat and eggs), and sheep (meat and wool).\"><span>production animals</span></a> (see paragraph <a href=\"/asc/360/905/#360-905-25-4\" class=\"xref\">905-360-25-4</a>), although the operating cycles are much shorter. </span></span></div></div>","snippet":"Animals with short productive lives, such as poultry, may be classified as inventory. Due to the short productive life of poultry, the cost of flocks may be classified as inventory. The accounting principles for poultry …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b2a0166725a3ed4f0b43b5081c35162fd1b6ecf1d8c4fd2b87dedbce80dc4d95","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"citation":"330-905-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\">For guidance on developing animals and animals held for sale, breeding animals, and production animals, see Subtopic <a altsource=\"GUID-1AF553F5-7DB8-4DDE-AE19-E997BFCB9F5F.ditamap\" class=\"ditamap\">905-360</a>.</div></div>","snippet":"For guidance on developing animals and animals held for sale, breeding animals, and production animals, see Subtopic 905-360.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6d3b0f4e62a8782a37618125430458282414ac329be685f9f7293a6a4b11774d","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3ec34fec09f2d5e778b55723b4dd5222d5445e312aa3dfaaf71319ce2aaa79ca","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"block":"Cooperatives","heading":null,"paragraphs":[{"citation":"330-905-25-5","para":"25-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_1459459E-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the boards of directors of agricultural marketing cooperatives operating on a pooling basis with no obligation to pay patrons fixed prices (pooling cooperatives) assign amounts that approximate estimated market to unprocessed products received from patrons, the assigned amounts are cost and shall be charged to cost of goods sold. </span></span></div></div>","snippet":"If the boards of directors of agricultural marketing cooperatives operating on a pooling basis with no obligation to pay patrons fixed prices (pooling cooperatives) assign amounts that approximate estimated market to unp…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c597175d357a9dd06069e394045d41f5bafd59d6e3c4a3ee2720525c209e2649","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"citation":"330-905-25-6","para":"25-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_145946B4-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Pooling cooperatives may use <a href=\"/glossary/n/#net-realizable-value\" class=\"term\" title=\"Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.\"><span>net realizable value</span></a> for determining pool proceeds, transferring inventory amounts to subsequent <a href=\"/glossary/p/#pools\" class=\"term\" title=\"Pools are accounting control centers used for determining earnings and patronage refunds due to particular patrons, including the following: An open pool is an accounting control center that is not closed at the end of each accounting period. Open pools are sometimes used by marketing cooperatives for crops that may not be sold for two or more years after their receipt from patrons. A single pool cooperative determines net proceeds or patronage refunds on the basis of overall operating results for all commodities marketed during an accounting period. A multiple pool cooperative determines net proceeds or patronage refunds on the basis of separate commodities, departments, or accounting periods.\"><span>pools</span></a>, or for other purposes (see column B in the table in Example 1 (paragraph <a href=\"/asc/330/905/#330-905-55-1\" class=\"xref\">905-330-55-1</a>)). </span></span></div></div>","snippet":"Pooling cooperatives may use net realizable value for determining pool proceeds, transferring inventory amounts to subsequent pools, or for other purposes (see column B in the table in Example 1 (paragraph 905-330-55-1))…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b36699f7afd32b9719e5752ae709e7e9ad7a6724bc490449537de000b64ddaa9","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"citation":"330-905-25-7","para":"25-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_145947CF-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the boards of directors of pooling cooperatives do not assign amounts that approximate market to unprocessed products received from patrons, the cooperatives shall account for inventories at net realizable value (see column C in the table in Example 1 (paragraph <a href=\"/asc/330/905/#330-905-55-1\" class=\"xref\">905-330-55-1</a>)). Because amounts that approximate estimated market are not assigned to products received from patrons, cost of goods sold will not include a charge for unprocessed products under this method. </span></span></div></div>","snippet":"If the boards of directors of pooling cooperatives do not assign amounts that approximate market to unprocessed products received from patrons, the cooperatives shall account for inventories at net realizable value (see …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:24479d098eb17cba4d80d2a8d59cb3ba367695875d267f184a0a54a69baf640b","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},{"citation":"330-905-25-8","para":"25-8","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_145948A6-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Pooling cooperatives shall not use the <a href=\"/glossary/c/#cash-advance-method\" class=\"term\" title=\"The cash advance method is a prohibited method of accounting for inventories of a marketing cooperative operating on a pooling basis. Under this method, inventories are accounted for at the amount of cash advances made to patrons. (This is sometimes referred to as the cost advance method.)\"><span>cash advance method</span></a> to account for inventories. </span></span></div></div>","snippet":"Pooling cooperatives shall not use the cash advance method to account for inventories.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa57e0696b3dd832a7f8d8585f0f6be2d795191d8f145bafb344d4ed2e74f568","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ae803bd5d1e8781fa65a00890022e153392265e29ab08b7800fd2678013b7e5","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8733a5b9282f737a59d8b513c8d389a6c03969845ca3df79aa1da0b9b132ef05","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8733a5b9282f737a59d8b513c8d389a6c03969845ca3df79aa1da0b9b132ef05","downloaded_from":"2026-09-09T23:51:32.233Z","last_downloaded_at":"2026-09-09T23:51:32.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479015","source_sha256":"38f149430aac80ebfb86aef3e367f922344bf34d5161e12cd400c620c13ea6b8"}}