# ASC 605-905: Revenue Recognition — Agriculture Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/605/905/) 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): 2026-09-10T00:45:40.215Z to 2026-09-10T00:45:59.310Z Record version: sha256:8d9ccdc5c77228756e225721815dceeed08a3492c3abd3a52d5faa28ad85fc27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905: Revenue Recognition — Agriculture ### Machine-generated study aids ```json { "summary": "ASC 605-905 provides industry-specific revenue recognition guidance for agricultural entities, with separate General and Cooperatives Subsections. It requires government income replacement and subsidy payments (deficiency, disaster, and other program payments) to be recorded as additional income when the amount of and right to receive the payment can be reasonably determined (605-905-25-1). For agricultural cooperatives it describes accepted methods of allocating overall, departmental, and functional losses among patrons, equities, and unallocated retained earnings, and distinguishes patronage from nonpatronage earnings (605-905-45-1). Most of the customer-revenue paragraphs were superseded by ASU 2014-09.", "key_points": [ "Deficiency payments, disaster payments, and other government production/indemnity/land-withholding programs all constitute additional income and are recorded when the amount of and right to receive the payment can be reasonably determined (605-905-25-1).", "An overall cooperative loss may be disposed of by allocating it to patrons on current patronage, allocating it to all equities, charging it to unallocated retained earnings (equitable when the loss relates to nonpatronage business), or offsetting it against future amounts available for patronage allocation (605-905-25-2).", "Cooperatives account for revenues and costs by function (supply or marketing) or by department, and expenses common to more than one function or department shall be allocated on a reasonable and consistent basis (605-905-25-4).", "Departmental or functional losses may be offset against profitable departments, recovered from that department's patrons under bylaws or a marketing agreement, subtracted from net nonpatronage income, charged to unallocated retained earnings, or offset against subsequent-year patronage allocations (605-905-25-4).", "Offsetting patronage losses against nonpatronage income may not eliminate income tax due on the nonpatronage income of a nonexempt cooperative (605-905-25-4(c)).", "Cooperative earnings are classified as patronage source earnings (excess of revenues over costs from transactions for or with patrons) or nonpatronage earnings such as investment income, nonpatronage rental income, and nonpatronage sales/purchases (605-905-45-1; 905-505-45-1).", "Scope follows the General and Cooperatives Subsections of Section 905-10-15; numerous paragraphs in Sections 05, 15, 25, and 45 were superseded by ASU 2014-09 (605-905-25-5 through 25-9; 605-905-45-2)." ], "categories": [ "Revenue", "Industry-specific", "Recognition", "Presentation" ], "audience_level": "intermediate", "student_note": "Most of this Subtopic's customer-contract revenue guidance was superseded by ASU 2014-09, so what survives is essentially government program income recognition and cooperative patronage/loss allocation mechanics — students often mistakenly apply ASC 606 to farm subsidy payments, which are not revenue from contracts with customers.", "related_topics": [ "905-10", "905-505", "606-10", "905-330", "905-405" ], "key_concepts": [ "agricultural cooperative", "patronage earnings", "nonpatronage earnings", "deficiency payments", "disaster payments", "government subsidy income", "loss allocation to patrons", "functional and departmental accounting" ] } ``` Source downloaded (UTC): 2026-09-10T00:45:40.215Z to 2026-09-10T00:45:40.215Z Record version: sha256:479cb3eff2e6b486e8261db8751b56ec6af843e81eb7c367e0babfe549208f6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/605/905/#00-status) SEC content: no ##### [605-905-00-1](https://asc.understandingaccounting.org/asc/605/905/#605-905-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:40.215Z to 2026-09-10T00:45:40.215Z Record version: sha256:7ad6d4bb687bc82ca373bd043da519f95cbd56399ab23097883bceaef957dd5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
CooperativesSupersededAccounting Standards Update No. 2014-0603/14/2014
Member of an Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
Nonmember of an Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
PatronsAmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
905-605-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-05-3AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-05-4SupersededAccounting Standards Update No. 2014-0905/28/2014
905-605-05-4AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-15-2AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-15-3SupersededAccounting Standards Update No. 2014-0905/28/2014
905-605-15-3AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-25-2AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-25-5SupersededAccounting Standards Update No. 2014-0905/28/2014
905-605-25-5AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-25-7 through 25-9
SupersededAccounting Standards Update No. 2014-0905/28/2014
905-605-45-1AmendedAccounting Standards Update No. 2014-0905/28/2014
905-605-45-1AmendedAccounting Standards Update No. 2014-0603/14/2014
905-605-45-2SupersededAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:45:42.156Z to 2026-09-10T00:45:42.156Z Record version: sha256:8e9096279bd91a2a313c67a3265317d6c23bfd11410aefd4181e8f3f6643b407 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/605/905/#05-overview-and-background) SEC content: no ##### [605-905-05-1](https://asc.understandingaccounting.org/asc/605/905/#605-905-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:42.156Z to 2026-09-10T00:45:42.156Z Record version: sha256:d59754ee0ffe65e358ed9f63148d3295ed31038fd7d363c76cdec2f5129b27f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses revenue recognition for entities in the agricultural industry. The guidance for accounting by different entities is presented in the following two Subsections: 1. a General 2. b Cooperatives 3. c [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-905-05-2](https://asc.understandingaccounting.org/asc/605/905/#605-905-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:42.156Z to 2026-09-10T00:45:42.156Z Record version: sha256:a56f2fd2f1eaec7419f4e03ba3734b4c0fbc4e94a80d08098d64378d7b801c3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance for all entities in the agricultural industry. ### Cooperatives ##### [605-905-05-3](https://asc.understandingaccounting.org/asc/605/905/#605-905-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:42.156Z to 2026-09-10T00:45:42.156Z Record version: sha256:55c1316a0e33e42708413f7d35b89a58ba032616bb72f9c99b49f3a14a86eeb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperative Subsections address revenue recognition for cooperatives in the agricultural industry. ### Cooperatives—Patrons ##### [605-905-05-4](https://asc.understandingaccounting.org/asc/605/905/#605-905-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:42.156Z to 2026-09-10T00:45:42.156Z Record version: sha256:4e4ab3d8a8eafb4590c90048e3952641a5dda07aee7dae21c9a543a665fd0d25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). Source downloaded (UTC): 2026-09-10T00:45:45.881Z to 2026-09-10T00:45:45.881Z Record version: sha256:54af275c9db22ff24d097d8db321ba9eb4eced4fa511032a7143e027abf5184b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/605/905/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [605-905-15-1](https://asc.understandingaccounting.org/asc/605/905/#605-905-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:45.881Z to 2026-09-10T00:45:45.881Z Record version: sha256:cd5949d26d45e2498f76bbe0b85a84302e89411a9768135344a16fa41d6f3f3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [General Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15. ### Cooperatives ##### [605-905-15-2](https://asc.understandingaccounting.org/asc/605/905/#605-905-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:45.881Z to 2026-09-10T00:45:45.881Z Record version: sha256:281b516828c2d0b2911ab68208dc0c0b3f5cd1e85dcba4c52c69f7bb88cfffdb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [Cooperatives Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15. ### Cooperatives—Patrons ##### [605-905-15-3](https://asc.understandingaccounting.org/asc/605/905/#605-905-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:45.881Z to 2026-09-10T00:45:45.881Z Record version: sha256:85022ebcbfd32c38b0d2ee1be9a757938510272139959444477657a819011b9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). Source downloaded (UTC): 2026-09-10T00:45:49.976Z to 2026-09-10T00:45:49.976Z Record version: sha256:bf80daccfc71ebb0d1c9b1bcb06f8014d57392beb32471eb856fa5712af96202 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-20: 20 Glossary [Read section](https://asc.understandingaccounting.org/asc/605/905/#20-glossary) SEC content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:8e2da7e2fdbe6b1579de85f70317dcfec1c64bfee8154f4b7d028fcc1226e82a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/605/905/#25-recognition) SEC content: no #### Income Replacement and Subsidy Programs ##### [605-905-25-1](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:7d429f2fc5b004b3bb8a1b3289f36135fd843cd6130b3a511216419793031d3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Income replacement and subsidy programs are designed to bring income from commodities to certain predetermined levels and include: 1. a Deficiency payments, which are subsidy payments resulting from low prices for designated commodities. 2. b Disaster payments, which may be made to producers when disasters prevent planting or reduce yields on [crops](https://asc.understandingaccounting.org/glossary/c/#crops "Grains, vegetables, fruits, berries, nuts, and fibers grown by agricultural producers."). 3. c Other programs, which are available to producers to encourage production, provide indemnity for certain types of losses, and reimburse producers for withholding land from production. All of the above payments, while different in nature, constitute additional income and should be recorded when the amount of and right to receive the payment can be reasonably determined. ### Cooperatives ##### [605-905-25-2](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:b39bf55078d33126e86edd7dd3a421d65a6ab629737e5d8bac9203c96cac6eac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A cooperative may incur an overall loss in a given year. The disposition of losses may be made based on bylaws or the board of directors' action. [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.") use a number of different methods for disposing of an overall loss, including the following: 1. a Allocating the loss to [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.") on the basis of current [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."). The loss may offset the patrons' equities, future patronage allocations, or future cash contributions. 2. b Allocating the loss to all equities without considering current patronage. However, patrons with substantial equities and decreasing patronage may be treated inequitably if this method is used. 3. c Charging the loss to unallocated retained earnings. This method is equitable when the loss is attributable to nonpatronage business. 4. d Offsetting the loss against amounts available for [patronage allocation](https://asc.understandingaccounting.org/glossary/p/#patronage-allocation "Patronage earnings distributed, or allocated, to individual patrons on the basis of each patron's proportionate share of total patronage. Such allocations, which include notification to the patron, may be made on a qualified or nonqualified basis.") in subsequent years before making any such allocation to patrons. This method may be acceptable if the patrons are substantially the same from year to year. #### Departmental and Functional Accounting ##### [605-905-25-3](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:e0db98b36b754e908e7e6a8fd5985f0c6f7ddf13a4343065d31a51327ff8487c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cooperatives operating on a functional or departmental basis may have net earnings from one function or department and operating losses from another. It is a common practice for losses from one function or department to be absorbed by profits from another function or department before earnings to patrons are allocated. Some cooperatives distribute departmental earnings to patrons and charge departmental losses to unallocated retained earnings. ##### [605-905-25-4](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:e0f80222a5f77b919e5b8a4f14939687dbf9f36fb68c70bed9dc0049b4719b59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To allocate earnings to patrons equitably, cooperatives usually account for revenues and costs by function (supply or marketing) or departments within the function. Expenses common to one or more functions or departments shall be allocated on a reasonable and consistent basis. In addition, one department of a cooperative may handle several commodities, and departmental revenues and expenses may have to be allocated among them. Cooperatives may incur a loss in one department or function and realize earnings in another. Methods of accounting for these departmental and functional losses include the following: 1. a Offsetting the losses of unprofitable departments against profitable ones, and allocating the remaining profit to the patrons of the profitable departments by using the allocation method adopted by the cooperative. 2. b Recovering the loss from the patrons of that department or function on the basis of bylaw provisions or a marketing agreement. 3. c Subtracting the loss from net nonpatronage income. Offsetting patronage losses against nonpatronage income may not eliminate the income tax due on the nonpatronage income of a nonexempt cooperative. 4. d Charging the loss to unallocated retained earnings, and allocating income from profitable departments or functions to patrons on the basis of the cooperative's allocation methods. 5. e Offsetting the losses against patronage allocation for subsequent years before making departmental and functional allocations to patrons. ### Cooperatives—Patrons ##### [605-905-25-5](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:df36b822d6040e56cd98b4d857d9836bfea9a20a78347c8b7d22a161b001d501 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-905-25-6](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:2056cbeab77856aa74fd44528950f05256a0eb5c59cb3c3233fa66cddd5ade67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. \[Not used\] ##### [605-905-25-7](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:adbbb6cdedf46a7c74d9f9ad045393775e0cef3b119a7d3ccf3dfc39ae8482dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-905-25-8](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:30f077d162e75e967b2b05ad3619c1e26e78939493d2ab768e8dea8bc679d1ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-905-25-9](https://asc.understandingaccounting.org/asc/605/905/#605-905-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:53.183Z to 2026-09-10T00:45:53.183Z Record version: sha256:9615418d924e1528ed8f2a89a85fa5f767502f033ce5615c1e351534ea8f077f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). Source downloaded (UTC): 2026-09-10T00:45:56.915Z to 2026-09-10T00:45:56.915Z Record version: sha256:60f3d0eb666f1174fe2bcff7fbd9167e37f9dc25e54c63ff3e1012982566ad24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/605/905/#45-other-presentation-matters) SEC content: no ### Cooperatives ##### [605-905-45-1](https://asc.understandingaccounting.org/asc/605/905/#605-905-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:56.915Z to 2026-09-10T00:45:56.915Z Record version: sha256:4b86765cc322e13d1fc2c486fe325642d142b5d3e773525a3bce9eb68e3e1015 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [905-505-45-1](https://asc.understandingaccounting.org/asc/505/905/#505-905-45-1), the earnings of [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.") are classified as either [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.") or nonpatronage. The excess of revenues over costs resulting from transactions for or with [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.") is patronage source earnings. As indicated in that paragraph, nonpatronage earnings result from transactions other than those with or for patrons. Examples are nonpatronage income from investments in securities, rental income from nonpatronage activities, and income recognized on sales or earned on purchases made on a nonpatronage basis. ### Cooperatives—Patrons ##### [605-905-45-2](https://asc.understandingaccounting.org/asc/605/905/#605-905-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:45:56.915Z to 2026-09-10T00:45:56.915Z Record version: sha256:225069ac62611aad60be4aa07bdce6a8fb48fa0c7073279a7181836442598c35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). Source downloaded (UTC): 2026-09-10T00:45:59.310Z to 2026-09-10T00:45:59.310Z Record version: sha256:3be79ae98aaf7b4614a7e89d4784542245c9c0a6d8fef36f37d13b4414bf28be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-905-75: 75 GAAP Taxonomy Elements [Read section](https://asc.understandingaccounting.org/asc/605/905/#75-gaap-taxonomy-elements) SEC content: no