The following table identifies the changes made to this Subtopic.
The Agriculture Topic includes the following Subtopics relating to
agricultural producers,
agricultural cooperatives, and
patrons of such cooperatives:
- a
Overall
- b
Presentation of Financial Statements
- c
Receivables
- d
Investments—Other
- e
Inventory
- f
Property, Plant, and Equipment
- g
Liabilities
- h
Equity
- i
Revenue Recognition—Cooperatives
- j
Cost of Sales and Services.
Each Subtopic provides background on the guidance provided.
The guidance throughout this Topic for accounting for different entities in the agricultural industry is presented in the following three Subsections:
- a
General
- b
Cooperatives
- c
Cooperatives—Patrons.
The General Subsections provide guidance for all entities operating in the agricultural industry, except those noted in paragraph
905-10-15-4.
Agricultural producers use every form of business organization, from sole proprietorship to a large publicly held entity. They engage in numerous activities, for example: - a
Growing wheat, milo, corn, and other grains
- b
Growing soybeans, vegetables, sugar beets, and sugarcane
- c
Growing citrus fruits, other fruits, grapes, berries, and nuts
- d
Growing cotton and other vegetable fibers
- e
Operating plant nurseries
- f
Breeding and feeding cattle, hogs, and sheep, including animals for wool production
- g
Operating dairies
- h
Operating poultry and egg production facilities
- i
Breeding horses
- j
Raising mink, chinchilla, and similar small animals
- k
Raising fish and shellfish.
In addition, the operations of agricultural producers often involve various combinations of those activities. Agricultural practices and products may vary still further because of differences in temperature, soil, rainfall, and regional economics. Farm products may be used in related activities, such as the feeding of hay and grain to livestock, or they may be marketed directly by the producer. Producers often sell products in accordance with government programs or through agricultural cooperatives. Marketing strategies may include forward contracts or commodity futures contracts to reduce the risks of fluctuations in market prices. Another difference between cooperatives and other business corporations is that the cooperative's bylaws usually require it to distribute assets to patrons, or allocate to patrons' accounts amounts equal to its earnings, on the basis of their patronage. Distributions to patrons are different from dividend payments to stockholders in other entities.
Cooperatives generally try to buy or sell at the current market price. Periodically, they determine total costs and make distributions to patrons in the form of cash, certificates, or other notices of allocation based on the excess of revenues over costs.
For an overview and background of cooperative members and
patrons of
agricultural cooperatives, see the
Cooperatives Subsection of Section 905-10-05.
The Subtopics within the Agriculture Topic only provide incremental industry-specific guidance for the entities defined in this Scope Section, or as further defined in the Scope Sections of the individual Agriculture Subtopics. Entities within the scope of this Topic shall also comply with the applicable standards not included in this Topic.
The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific qualifications noted in the other Subsections of this Section.
The Agriculture Topic provides guidance for all entities in the agricultural industry, including
agricultural producers and agricultural cooperatives, with the exceptions noted below. The Cooperatives Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see the
General Subsection of Section 905-10-15, with specific qualifications noted below.
The guidance in the Cooperatives Subsections applies to the following transactions and activities:
- a
Accounting by agricultural cooperatives for products received from patrons.
The Cooperatives—Patrons Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see the
General Subsection of Section 905-10-15, with specific qualifications noted below.
The guidance in the Cooperatives—Patrons Subsections applies to the following transactions and activities:
- a
Accounting by patrons for product deliveries to cooperatives
- b
Accounting by patrons for investments in and income from cooperatives.