# ASC 405-905-25: Liabilities — Agriculture — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/405/905/#25-recognition)

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## ASC 405-905-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/405/905/#25-recognition)

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### Cooperatives

#### Pooling Cooperatives

##### [405-905-25-1](https://asc.understandingaccounting.org/asc/405/905/#405-905-25-1)

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If the boards of directors of agricultural marketing cooperatives operating on a pooling basis with no obligation to pay [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.") fixed prices (pooling cooperatives) assign amounts that approximate estimated [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.") to unprocessed products received from patrons, the [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.") shall be credited to amounts due patrons. When assigned amounts are used, they should approximate estimated net realizable value of unprocessed products delivered by patrons (an example of inventories at lower of cost and net realizable value is provided in Example 1 (see paragraph [905-330-55-1](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-1))).

#### Marketing Cooperatives

##### [405-905-25-2](https://asc.understandingaccounting.org/asc/405/905/#405-905-25-2)

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The cooperative estimates a liability to patrons equal to the assigned amount for the delivered product, and it usually pays this liability on a short-term basis. The excess of revenues over the assigned amounts and operating costs at the end of a pool period, which may be a week, a month, a year, or longer, is paid or allocated to patrons. Assets equal to that excess may be distributed to the patrons or retained by the cooperative.