{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/330/905/#55-implementation-guidance-and-illustrations","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":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":"Cooperatives","heading":"Illustrations","paragraphs":[{"citation":"330-905-55-1","para":"55-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Example illustrates the guidance in paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/330/905/#330-905-25-6\" class=\"xref\">905-330-25-6 through 25-7</a></div> and <a href=\"/asc/330/905/#330-905-35-5\" class=\"xref\">905-330-35-5</a>.</div> </div>","snippet":"This Example illustrates the guidance in paragraphs 905-330-25-6 through 25-7 and 905-330-35-5.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cf4cb6da63f057d0add5865c8bc72d826874eec13caae88125cfe21af3d2087","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}},{"citation":"330-905-55-2","para":"55-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_14CC0A16-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In this Example, inventory is measured using first-in, first-out (FIFO) and the following assumptions apply: </span></span> <ul class=\"ul simple\" id=\"d3e4250-110046__GUID-CCF81435-00CB-4F1B-90CF-F4E14532E97C\"> <li class=\"li\" id=\"d3e4250-110046__SL66094424-110046\"> <div class=\"p\"> <div class=\"fig figure fignone\"> <img src=\"/asc-img/GUID-D642F29C-99D4-4315-B7CE-16008A7CD7AD-low.gif\" altsource=\"GUID-D642F29C-99D4-4315-B7CE-16008A7CD7AD-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_14CC0FAF-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\">Sales \" $129,630 \" Beginning inventory Net realizable value\t\" 31,128 \" Lower of cost and net realizable value\t\" 28,380 \" Assigned value of patrons' raw product received \" 56,500 \" Ending inventory Net realizable value\t\" 35,596 \" Lower of cost and net realizable value\t\" 32,360 \" Income taxes \" 1,250 \" Other costs and expenses \" 56,580 \" \"Amounts paid to patrons, retains, and nonpatronage earnings\" \" 74,430 \" Amounts due patrons at beginning of year Lower of cost and net realizable value method\t\" 8,910 \" Net realizable value method\t\" 11,748 \" </div></div> </div> </li> </ul> </div> </div>","snippet":"In this Example, inventory is measured using first-in, first-out (FIFO) and the following assumptions apply:","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8fba49c4e36aa16b22481a6bbe372a89b324d6d390eb5a401abd3039b3245479","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}},{"citation":"330-905-55-3","para":"55-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_14CC10F2-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The following tables illustrate the statement of net earnings prepared under each of two possible methods of accounting for inventories (columns A and B), the statement of net proceeds prepared under the <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> method (column C), and the respective statements of amounts due patrons, if such latter statement is included in the financial statements. Column A demonstrates the lower of cost and net realizable value method with patrons' raw product being charged to cost of production at <a href=\"/glossary/a/#assigned-amounts\" class=\"term\" title=\"Amounts used to record products delivered by patrons of a marketing cooperative operating on a pooling basis, and the related liability to patrons if the ultimate amounts to be paid to patrons are determined when the pool is closed. These amounts may be established on the basis of current prices paid by other buyers (sometimes referred to as field prices), or they may be established by the cooperative's board of directors. The assigned amounts are sometimes referred to as established values.\"><span>assigned amounts</span></a>. Column B demonstrates the net realizable value method with patrons' raw product being charged to cost of production at assigned amounts. Column C demonstrates the net realizable value method when no amounts are assigned to patrons' raw product; therefore, there is no charge to cost of production for patrons' raw product. </span></span> <ul class=\"ul simple\" id=\"d3e4250-110046__GUID-A295CB21-256A-4C44-BF13-67207D45D97F\"> <li class=\"li\" id=\"d3e4250-110046__SL66094426-110046\"> <div class=\"p\"> <div class=\"fig figure fignone\"> <img src=\"/asc-img/GUID-22A0FF8F-7F51-458D-AF8E-FFC80F529FEE-low.gif\" altsource=\"GUID-22A0FF8F-7F51-458D-AF8E-FFC80F529FEE-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_14CC166F-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\"> Inventories Valued At Lower of Cost and Net Realizable Value (Column A) \"Net Realizable Value (Column B)\" \"Net Realizable Value (Column C)\" Sales \" $129,630 \" \" $129,630 \" \" $129,630 \" Costs and expenses (I) \" 109,100 \" \" 108,702 \" \" 52,202 \" Earnings before income taxes \" 20,530 \" \" 20,928 \" - Proceeds before income taxes - - \" 77,428 \" Income taxes \" 1,250 \" \" 1,250 \" \" 1,250 \" Net earnings \" $19,280 \" \" $19,678 \" Net proceeds \" $76,178 \" I. Beginning inventory \" $28,380 \" \" $31,218 \" \" $31,218 \" Assigned value of patrons' raw product received \" 56,500 \" \" 56,500 \" - Ending inventory \" (32,360)\" \" (35,596)\" \" (35,596)\" Other costs and expenses \" 56,580 \" \" 56,580 \" \" 56,580 \" \" $109,100 \" \" $108,702 \" \" $52,202 \" </div></div> </div> </li> <li class=\"li\" id=\"d3e4250-110046__SL66094427-110046\"> <div class=\"p\"> <div class=\"fig figure fignone\"> <img src=\"/asc-img/GUID-8D646031-1FE0-44AF-8DDC-9C2E944507DC-low.gif\" altsource=\"GUID-8D646031-1FE0-44AF-8DDC-9C2E944507DC-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_14CC1B28-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\">Statement of Amounts Due Patrons Inventories Valued At Lower of Cost and Net Realizable Value (Column A) Net Realizable Value (Column B) Net Realizable Value (Column C) Amounts due patrons at beginning of year \" $8,910 \" \" $11,748 \" \" $11,748 \" Net earnings \" 19,280 \" \" 19,678 \" - Net proceeds - - \" 76,178 \" Assigned value of patrons' raw product received \" 56,500 \" \" 56,500 \" - \" 84,690 \" \" 87,926 \" \" 87,926 \" \"Less amounts paid to patrons, retains, and nonpatronage earnings\" \" 74,430 \" \" 74,430 \" \" 74,430 \" Amounts due patrons at end of year \" $10,260 \" \" $13,496 \" \" $13,496 \" </div></div> </div> </li> </ul> </div> </div>","snippet":"The following tables illustrate the statement of net earnings prepared under each of two possible methods of accounting for inventories (columns A and B), the statement of net proceeds prepared under the net realizable v…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d417cf0e612cb7a9aa3278dee0fbbaf6bae05f184a1825222a1ba4b99479d1ae","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}},{"citation":"330-905-55-4","para":"55-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_14CC1C58-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Under the two inventory methods presented, the difference in amounts due patrons at the end of the year results from the difference in the ending inventory valuations, illustrated as follows. </span></span> <ul class=\"ul simple\" id=\"d3e4250-110046__GUID-EAEDC794-F486-4053-9B8E-A181F51181F0\"> <li class=\"li\" id=\"d3e4250-110046__SL66094723-110046\"> <div class=\"p\"> <div class=\"fig figure fignone\"> <img src=\"/asc-img/GUID-E1F78FFB-2B5D-4D77-A389-3D89391CAA45-low.gif\" altsource=\"GUID-E1F78FFB-2B5D-4D77-A389-3D89391CAA45-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_14CC20DF-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\">Inventories of finished goods and goods in process at: Net realizable value \" $35,596 \" Lower of cost and net realizable value \" (32,360)\" \" 3,326 \" Amounts due patrons at end of year on lower of cost and net realizable value basis \" 10,260 \" Amounts due patrons at end of year on net realizable value basis \" $13,496 \" </div></div> </div> </li> </ul> </div> </div>","snippet":"Under the two inventory methods presented, the difference in amounts due patrons at the end of the year results from the difference in the ending inventory valuations, illustrated as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1a64ad430af6db14a6b1287a10183fc8319351d8309bc8d0221526ef942ec2fc","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dabd7796ad563ba8084597898897cbf79f4fbe379dc2cb490d52b33b7fab4b2d","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5c897eda7689cb89c1e5882d40b499f0b4356e864c3902bfdd7007c00d80ad29","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5c897eda7689cb89c1e5882d40b499f0b4356e864c3902bfdd7007c00d80ad29","downloaded_from":"2026-09-09T23:51:49.173Z","last_downloaded_at":"2026-09-09T23:51:49.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477364","source_sha256":"46eec8013bff330eaba609d8934b13206c8db1a8059e7e754c56f35ca156677c"}}