# ASC 330-905-55: Inventory — Agriculture — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/330/905/#55-implementation-guidance-and-illustrations) 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): 2026-09-09T23:51:49.173Z to 2026-09-09T23:51:49.173Z Record version: sha256:5c897eda7689cb89c1e5882d40b499f0b4356e864c3902bfdd7007c00d80ad29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 330-905-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/330/905/#55-implementation-guidance-and-illustrations) SEC content: no ### Cooperatives #### Illustrations ##### [330-905-55-1](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:51:49.173Z to 2026-09-09T23:51:49.173Z Record version: sha256:3cf4cb6da63f057d0add5865c8bc72d826874eec13caae88125cfe21af3d2087 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [905-330-25-6 through 25-7](https://asc.understandingaccounting.org/asc/330/905/#330-905-25-6) and [905-330-35-5](https://asc.understandingaccounting.org/asc/330/905/#330-905-35-5). ##### [330-905-55-2](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:51:49.173Z to 2026-09-09T23:51:49.173Z Record version: sha256:8fba49c4e36aa16b22481a6bbe372a89b324d6d390eb5a401abd3039b3245479 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, inventory is measured using first-in, first-out (FIFO) and the following assumptions apply: - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D642F29C-99D4-4315-B7CE-16008A7CD7AD-low.gif) Sales " $129,630 " Beginning inventory Net realizable value " 31,128 " Lower of cost and net realizable value " 28,380 " Assigned value of patrons' raw product received " 56,500 " Ending inventory Net realizable value " 35,596 " Lower of cost and net realizable value " 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 " 8,910 " Net realizable value method " 11,748 " ##### [330-905-55-3](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:51:49.173Z to 2026-09-09T23:51:49.173Z Record version: sha256:d417cf0e612cb7a9aa3278dee0fbbaf6bae05f184a1825222a1ba4b99479d1ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 value](https://asc.understandingaccounting.org/glossary/n/#net-realizable-value "Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.") 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 [assigned amounts](https://asc.understandingaccounting.org/glossary/a/#assigned-amounts "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."). 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. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-22A0FF8F-7F51-458D-AF8E-FFC80F529FEE-low.gif) 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 " - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8D646031-1FE0-44AF-8DDC-9C2E944507DC-low.gif) 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 " ##### [330-905-55-4](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:51:49.173Z to 2026-09-09T23:51:49.173Z Record version: sha256:1a64ad430af6db14a6b1287a10183fc8319351d8309bc8d0221526ef942ec2fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E1F78FFB-2B5D-4D77-A389-3D89391CAA45-low.gif) 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 "