ASC

ASC 705-905

Agriculture

705 Cost of Sales and Services

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In brief

IntermediateRecognitionIndustry-specificInventory and PP&E

ASC 705-905 is a "link-only" subtopic: it contains no substantive rules of its own and simply directs agricultural cooperatives to the guidance elsewhere in the Agriculture topic on when unprocessed products received from patrons are charged to cost of goods sold. The core point is that a COGS charge (and the related liability to patrons) arises only when the cooperative's board of directors assigns an amount to those unprocessed products.

Key points (5)
  • This Subtopic only provides links to guidance for agricultural cooperatives on amounts charged to cost of goods sold when boards of directors assign amounts to unprocessed products (705-905-05-1; 705-905-05-2).
  • For the amount of liability to be established and the related charge to cost of goods sold when the board of directors assigns amounts to unprocessed products received from patrons, see paragraph 905-405-25-1 (705-905-25-1).
  • When the board of directors does not assign amounts to unprocessed products received from patrons, cost of goods sold does not include a charge for those products (705-905-25-2, citing 905-330-25-7).
  • An illustration of the no-assignment fact pattern appears in Example 1 at paragraph 905-330-55-1 (705-905-25-2).
  • Because the guidance is limited to the Cooperatives Subsections, it applies to cooperative entities receiving products from patrons rather than to agricultural producers generally.

For students. This subtopic is a signpost, not a rule source — quoting it as authority is the common mistake; the operative guidance is in 905-405-25-1 and 905-330-25-7. Remember the trigger: no board assignment of value to patrons' unprocessed products means no COGS charge and no related liability.

agricultural cooperativeunprocessed productspatronsboard of directors assignmentcost of goods soldliability to patronslink-only subtopic

Machine-generated study aid for ASC 705-905. Check the source paragraphs below.

705-905-00Status

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705-905-05Overview and Background

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705-905-05-1
This Subtopic only provides links to guidance for agricultural cooperatives on amounts that are charged to costs of goods sold when boards of directors assign amounts to unprocessed products.

Cooperatives

705-905-05-2
The Cooperatives Subsections only provide links to guidance for agricultural cooperatives on amounts that are charged to costs of goods sold when boards of directors assign amounts to unprocessed products.

705-905-25Recognition

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Cooperatives

705-905-25-1
See paragraph 905-405-25-1 for guidance on amounts of liabilities to be established and the related amount to be charged to cost of goods sold when boards of directors assign amounts to unprocessed products received from patrons.
705-905-25-2
See paragraph 905-330-25-7 indicating that cost of goods sold will not include a charge for unprocessed products received from patrons when amounts are not assigned to such products by the board of directors. See Example 1 (paragraph 905-330-55-1) for an illustration of this guidance.

Related subtopics