# ASC 705-905: Cost of Sales and Services — Agriculture Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/705/905/) 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): 2026-09-10T00:56:04.703Z to 2026-09-10T00:56:11.435Z Record version: sha256:de1c52de8bbde65c169c96ce5824f43ea685ac5b16020c9c2ced5e25b8511ffd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 705-905: Cost of Sales and Services — Agriculture ### Machine-generated study aids ```json { "summary": "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": [ "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." ], "categories": [ "Recognition", "Industry-specific", "Inventory and PP&E" ], "audience_level": "intermediate", "student_note": "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.", "related_topics": [ "905-405", "905-330", "905-605", "705-10", "330-10" ], "key_concepts": [ "agricultural cooperative", "unprocessed products", "patrons", "board of directors assignment", "cost of goods sold", "liability to patrons", "link-only subtopic" ] } ``` Source downloaded (UTC): 2026-09-10T00:56:04.703Z to 2026-09-10T00:56:04.703Z Record version: sha256:e9b8ac2bab072e2e7bcd62ba1bfc45d85084303f430e9298417f47c2f34175af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 705-905-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/705/905/#00-status) SEC content: no ##### [705-905-00-1](https://asc.understandingaccounting.org/asc/705/905/#705-905-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:56:04.703Z to 2026-09-10T00:56:04.703Z Record version: sha256:ccb65888654765a45ec1183c117d329e9f03c1ef72c09f2801ea2709f7350d2d 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
905-705-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
905-705-05-2AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-10T00:56:07.104Z to 2026-09-10T00:56:07.104Z Record version: sha256:96d20eb57d39ed2ff8be113d87eb40b81482f31594a9a21256cdd467b2f8a475 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 705-905-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/705/905/#05-overview-and-background) SEC content: no ##### [705-905-05-1](https://asc.understandingaccounting.org/asc/705/905/#705-905-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:56:07.104Z to 2026-09-10T00:56:07.104Z Record version: sha256:0eca6d431cda159494e55bd23c11321235e91b9c9fbea6e27401821aac471b41 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic only provides links to guidance for [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.") on amounts that are charged to costs of goods sold when boards of directors assign amounts to unprocessed products. ### Cooperatives ##### [705-905-05-2](https://asc.understandingaccounting.org/asc/705/905/#705-905-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:56:07.104Z to 2026-09-10T00:56:07.104Z Record version: sha256:fc4d558a19df428e1b734715ec38ec6bf8e598105d6f753377d775245d392a52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives Subsections only provide links to guidance for [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.") on amounts that are charged to costs of goods sold when boards of directors assign amounts to unprocessed products. Source downloaded (UTC): 2026-09-10T00:56:11.435Z to 2026-09-10T00:56:11.435Z Record version: sha256:5bf8975b57e8bf940716ca6264592afe9f2c6da48454a188369dd69e8c06af48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 705-905-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/705/905/#25-recognition) SEC content: no ### Cooperatives ##### [705-905-25-1](https://asc.understandingaccounting.org/asc/705/905/#705-905-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:56:11.435Z to 2026-09-10T00:56:11.435Z Record version: sha256:2e941261069da8f68b877bfc887505a63ea22c0e19ac91f217108f0a2b6cd52c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [905-405-25-1](https://asc.understandingaccounting.org/asc/405/905/#405-905-25-1) 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](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."). ##### [705-905-25-2](https://asc.understandingaccounting.org/asc/705/905/#705-905-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:56:11.435Z to 2026-09-10T00:56:11.435Z Record version: sha256:e7c4493fe42f2076768e58d1a3b6bc489e70681dd53beb9c28d50e07de6df1da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [905-330-25-7](https://asc.understandingaccounting.org/asc/330/905/#330-905-25-7) 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](https://asc.understandingaccounting.org/asc/330/905/#330-905-55-1)) for an illustration of this guidance.