# ASC Topic 905: Agriculture Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/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): 2026-09-10T02:08:37.690Z to 2026-09-10T02:08:46.650Z Record version: sha256:4787f7d8d4a3bbf72b305810a89589ac3ac805d732ade5e8ed7b65774931bc60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 905 provides incremental, industry-specific accounting guidance for agricultural producers, agricultural cooperatives, and patrons of cooperatives; entities in scope must still apply all other applicable GAAP (905-10-15-1). Its guidance is organized into three Subsections—General, Cooperatives, and Cooperatives—Patrons (905-10-05-2; 905-10-05-3)—and covers inventories of agricultural producers and development costs of land, trees and vines, intermediate-life plants, and animals (905-10-15-5), while excluding timber growers, tropical pineapple and sugarcane growers, raisers of animals for competitive sports, and merchants/noncooperative processors (905-10-15-4). The most important idea is the cooperative "price adjustment theory": a cooperative agrees to do business at cost and must return excess amounts to patrons, so patronage distributions are price adjustments rather than dividends (905-10-05-7; 905-10-05-8), a characterization that also supports the Internal Revenue Code deduction for earnings allocated to patrons (905-10-05-9). Source downloaded (UTC): 2026-09-10T02:08:37.690Z to 2026-09-10T02:08:46.650Z Record version: sha256:ccfb40b46b8f456b0ae4b07fc31923358abb9000d70d0075067e23a1d6f7d5b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 905-10: Agriculture — Overall ### Machine-generated study aids ```json { "summary": "ASC 905-10 is the Overall subtopic of the Agriculture Topic, setting out the background and scope for industry-specific accounting by agricultural producers, agricultural cooperatives, and patrons of those cooperatives. The Topic's guidance is organized into three Subsections—General, Cooperatives, and Cooperatives—Patrons—and provides only incremental industry guidance, so entities must also apply all other applicable GAAP (905-10-15-1). It covers inventories of agricultural producers and development costs of land, trees and vines, intermediate-life plants, and animals (905-10-15-5), but excludes timber growers, tropical pineapple and sugarcane growers, raisers of animals for competitive sports, and merchants/noncooperative processors (905-10-15-4).", "key_points": [ "The Agriculture Topic gives only incremental industry-specific guidance; entities in scope must also comply with all other applicable standards (905-10-15-1).", "Guidance is presented in three Subsections—General, Cooperatives, and Cooperatives—Patrons—with the General Subsection covering all agricultural industry entities except those scoped out (905-10-05-2; 905-10-05-3).", "The Topic does not apply to growers of timber, growers of pineapple and sugarcane in tropical regions, raisers of animals for competitive sports, or merchants and noncooperative processors of agricultural products (905-10-15-4).", "The Topic applies to inventories of agricultural producers and to development costs of land, trees and vines, intermediate-life plants, and animals (905-10-15-5).", "A cooperative typically distributes assets to patrons on a patronage basis, is controlled by members as patrons rather than equity investors, limits membership to patrons, limits the return on capital investment, and does at least 50 percent of its business on a patronage basis (905-10-05-5).", "Under the price adjustment theory, a cooperative agrees to do business at cost and must return to patrons amounts received in excess of cost, so patronage distributions differ from dividends (905-10-05-7; 905-10-05-8); the Internal Revenue Code allows deductions for earnings allocated to patrons if certain requirements are met (905-10-05-9).", "The Cooperatives Subsections address accounting by cooperatives for products received from patrons, while the Cooperatives—Patrons Subsections address patrons' accounting for product deliveries and for investments in and income from cooperatives (905-10-15-8; 905-10-15-11)." ], "categories": [ "Industry-specific", "Inventory and PP&E", "Revenue" ], "audience_level": "intermediate", "student_note": "This subtopic is mostly scope and background, but it is the gatekeeper: the most common mistake is assuming agriculture guidance replaces general GAAP or applies to every farm-related business—it is incremental only, and timber growers, tropical pineapple/sugarcane growers, sport-animal raisers, and noncooperative processors are expressly excluded.", "related_topics": [ "905-330", "905-360", "905-605", "905-505", "905-310", "330" ], "key_concepts": [ "agricultural producer", "agricultural cooperative", "patronage basis", "price adjustment theory", "patronage distributions", "development costs", "supply and marketing cooperatives", "incremental industry guidance" ] } ``` Source downloaded (UTC): 2026-09-10T02:08:37.690Z to 2026-09-10T02:08:37.690Z Record version: sha256:aca51c76c74c912d72b3bc988db0adff12c1524f2fc4042971989383a4babf8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 905-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/905/10/#00-status) SEC content: no ##### [905-10-00-1](https://asc.understandingaccounting.org/asc/905/10/#905-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:37.690Z to 2026-09-10T02:08:37.690Z Record version: sha256:29f76c208bc7f9e329d6bbe373ff563bf0d863769afa62846102cafad5099b3e 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
905-10-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
905-10-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-05-3AmendedMaintenance Update 2020-18 (PDF)11/25/2020
905-10-05-6AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-05-13AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-15-3AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-15-6AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-15-7AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-15-9AmendedAccounting Standards Update No. 2014-0603/14/2014
905-10-15-10AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:76f665bbccf78039d106d6e5c745aba2afb553923f61032baaa720549ebba99d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 905-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/905/10/#05-overview-and-background) SEC content: no ##### [905-10-05-1](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:d54051c75fe005bbc48eb3c10ba1d0776b43c0785f3238944ad8a83d5c1cd55e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Agriculture Topic includes the following Subtopics relating to [agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter."), [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."), and [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.") of such cooperatives: 1. a Overall 2. b Presentation of Financial Statements 3. c Receivables 4. d Investments—Other 5. e Inventory 6. f Property, Plant, and Equipment 7. g Liabilities 8. h Equity 9. i Revenue Recognition—Cooperatives 10. j Cost of Sales and Services. Each Subtopic provides background on the guidance provided. ##### [905-10-05-2](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:b3aa497578add18f20287d4c7737add4cac5baac69542f52d1dd20b2786fa3be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance throughout this Topic for accounting for different entities in the agricultural industry is presented in the following three Subsections: 1. a General 2. b Cooperatives 3. c Cooperatives—Patrons. ##### [905-10-05-3](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:b45e39d2f9c1d5963aeda0a1ef0a1a280a91566e6147e4d1ef34c6717cc79d27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance for all entities operating in the agricultural industry, except those noted in paragraph [905-10-15-4](https://asc.understandingaccounting.org/asc/905/10/#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: 1. a Growing wheat, milo, corn, and other grains 2. b Growing soybeans, vegetables, sugar beets, and sugarcane 3. c Growing citrus fruits, other fruits, grapes, berries, and nuts 4. d Growing cotton and other vegetable fibers 5. e Operating plant nurseries 6. f Breeding and feeding cattle, hogs, and sheep, including animals for wool production 7. g Operating dairies 8. h Operating poultry and egg production facilities 9. i Breeding horses 10. j Raising mink, chinchilla, and similar small animals 11. 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](https://asc.understandingaccounting.org/glossary/l/#livestock "Registered and commercial cattle, sheep, hogs, horses, poultry, and small animals bred and raised by agricultural producers."), 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](https://asc.understandingaccounting.org/glossary/f/#futures-contract "A standard and transferable form of contract that binds the seller to deliver to the bearer a standard amount and grade of a commodity to a specific location at a specified time. It usually includes a schedule of premiums and discounts for quality variation.") to reduce the risks of fluctuations in market prices. ##### [905-10-05-4](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:c7b07bd8cdbc9817e9510f577252560a867fbff2fe190e847586719c118b173f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Agricultural producers often borrow to finance [crop development costs](https://asc.understandingaccounting.org/glossary/c/#crop-development-costs "Costs incurred up to the time crops are produced in commercial quantities, including the costs of land preparation, plants, planting, fertilization, grafting, pruning, equipment use, and irrigation.") and the costs of acquiring facilities and equipment. ### Cooperatives ##### [905-10-05-5](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:dcccfee94687af8ce16731c0ea925d23f8096e63926e5a2696ab537b3d75993c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A cooperative typically has the following characteristics: 1. a Assets are distributed periodically 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 a [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.") basis. In certain situations, however, assets in the amount of net-of-tax earnings may be accumulated by the cooperative and may or may not be allocated to patrons' accounts. 2. b Members control the organization in their capacity as patrons and not as equity investors. 3. c Membership is limited to patrons. 4. d The return that can be paid on capital investment is limited. 5. e At least 50 percent of the cooperative's business is done on a patronage basis. ##### [905-10-05-6](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:3d528b522cfb4ec354112e234a3e5526062f6e43df224f2a848b2e7304c66e62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The main difference between [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.") and other business entities is that cooperatives and their patrons operate as single economic units to accomplish specific business purposes, such as the marketing of farm products, the purchase of supplies, or the performance of services for the benefit of the patrons. The aim is to reduce costs, increase sales proceeds, and share risks through the increased bargaining power that results from the patrons' combined resources and buying power. The patron's role as an investor is secondary and incidental to his business relationship with the cooperative. ##### [905-10-05-7](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:28e8d10b1888734d5d583c04a2aa09cb95037a2089cee441a0c1daa354b1dceb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [905-10-05-8](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:ac4f60836e67ce08f7404ed5aba3c57058a10e06cd68cd688a04c54fc2c598c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the [price adjustment theory](https://asc.understandingaccounting.org/glossary/p/#price-adjustment-theory "The distribution of earnings on the basis of patronage."), a cooperative agrees to do business at cost. In a [purchasing cooperative](https://asc.understandingaccounting.org/glossary/p/#purchasing-cooperative "Purchasing cooperatives purchase, manufacture, distribute, and provide feed, petroleum products, fertilizer, chemicals, farm supplies, and services of various kinds to their patrons. See Supply Cooperative."), for example, a patron may be charged more than cost at the time of purchase; however, the cooperative normally must return to the patron all amounts received in excess of cost, including costs of operation and processing. ##### [905-10-05-9](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:176e946cd0889fafd4bfc4f2aea10e10c9bc50dc7e629c1830d73c0330611b5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If certain requirements are met, the Internal Revenue Code permits cooperatives tax deductions for earnings allocated to their patrons. Earnings not so allocated are taxed at corporate income tax rates. Both [exempt and nonexempt cooperatives](https://asc.understandingaccounting.org/glossary/e/#exempt-and-nonexempt-cooperatives "Cooperatives classified according to their federal income tax status. Both types are permitted to deduct from taxable income patronage distributed or allocated on a qualified basis to patrons to the extent that the distributions represent earnings of the cooperative derived from business done with or for the patrons. In addition, cooperatives meeting the requirements of Internal Revenue Code section 521 (exempt cooperatives) are permitted to deduct limited amounts paid as dividends on capital stock and distributions to patrons of income from business done with the U.S. government or its agencies and income from nonpatronage sources.") are subject to federal income taxes on [patronage earnings](https://asc.understandingaccounting.org/glossary/p/#patronage-earnings "The excess of a cooperative's revenues over its costs arising from transactions done with or for its patrons. Generally a significant portion of those earnings is allocated to the cooperative's patrons in the form of cash, allocated equities, or both.") that are not distributed in cash or allocated on a qualified basis. Nonexempt cooperatives are subject to income taxes on earnings arising from sources other than patronage. ##### [905-10-05-10](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:ab1206dff57cd4e4c700811dccd7a7b6f36ad3f01808d8a5b72c426fdc08ec4b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [905-10-05-11](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:0beac1b9fabf542945c55497ac7d03801c07f9d4c6e403d47e8e03b13e83ab81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The two major types of cooperatives are supply cooperatives and marketing cooperatives: 1. a [Supply](https://asc.understandingaccounting.org/glossary/s/#supply-cooperative "A cooperative that supplies to its patrons goods and services used by them in producing their products. Supply or purchasing cooperatives obtain or produce such items as building materials, equipment, feed, seeds, fertilizer, chemicals, and petroleum products for their patrons. See Purchasing Cooperative.") or [purchasing cooperatives](https://asc.understandingaccounting.org/glossary/p/#purchasing-cooperative "Purchasing cooperatives purchase, manufacture, distribute, and provide feed, petroleum products, fertilizer, chemicals, farm supplies, and services of various kinds to their patrons. See Supply Cooperative.") 2. b [Marketing cooperatives](https://asc.understandingaccounting.org/glossary/m/#marketing-cooperative "A cooperative that markets the products (crops, livestock, and so on) produced by its patrons. Marketing cooperatives provide means for agricultural producers to process and sell their products."). ##### [905-10-05-12](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:64045999b116065c3b2977efd10e3adc324f48c58f7987ea2da824462a1ebe73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Services related to those functions are provided by some supply and marketing cooperatives; they are also provided by separate associations known as [service cooperatives](https://asc.understandingaccounting.org/glossary/s/#service-cooperative "A cooperative that provides to its patrons such services as trucking, storage, accounting, and data processing."), which include [bargaining cooperatives](https://asc.understandingaccounting.org/glossary/b/#bargaining-cooperative "A special type of service cooperative that serves its members by negotiating with processors on their behalf."). The members of local cooperatives are [agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter.") whose activities are generally centralized. The members of federated cooperatives are other cooperatives whose activities are regional. Some cooperatives have both individual producers and other cooperatives as members. ### Cooperatives—Patrons ##### [905-10-05-13](https://asc.understandingaccounting.org/asc/905/10/#905-10-05-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:40.144Z to 2026-09-10T02:08:40.144Z Record version: sha256:56e3b3bc42739167b3ccf7356e4637fd5a2b127bbad2e8fc7257ac2543d5d90b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an overview and background of cooperative members and [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.") 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."), see the [Cooperatives Subsection](https://asc.understandingaccounting.org/asc/905/10/#05-overview-and-background) of Section 905-10-05. Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:989cff6facea5ce503fc94a09a1fbb2535d8e02aec031869b3d9a07500676097 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 905-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [905-10-15-1](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:d16c627266783c9e7752bac1d38ff8182f187211cee51a803ab521da2df656b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [905-10-15-2](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:a066d4c0d42c5465cc66b8774d412f0db981e255d6e1aad3932639daa039f7c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific qualifications noted in the other Subsections of this Section. #### Entities ##### [905-10-15-3](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:399f13c13424b3c4aac3b07ec80cf18062558add602441dcc25f660bd9023580 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Agriculture Topic provides guidance for all entities in the agricultural industry, including [agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter.") and [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."), with the exceptions noted below. ##### [905-10-15-4](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:7f2f4ade24bc81367819886345262948e60d9ff3ce0744ad1082708cc1b1f86c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following entities: 1. a Growers of timber 2. b Growers of pineapple and sugarcane in tropical regions 3. c Raisers of animals for competitive sports 4. d Merchants or noncooperative processors of agricultural products that purchase commodities from growers, contract harvesters, or others serving agricultural producers. #### Transactions ##### [905-10-15-5](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:9218b873aa4886dc0da00fdf46e1f768c38791e1d3c2df2bd5b15668d3330feb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic applies to the following transactions and activities: 1. a Inventories of agricultural producers 2. b Development costs of land, trees and vines, [intermediate-life plants](https://asc.understandingaccounting.org/glossary/i/#intermediate-life-plants "Intermediate-life plants have growth and production cycles of more than one year but less than those of trees and vines."), and animals of agricultural producers. ### Cooperatives #### Overall Guidance ##### [905-10-15-6](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:4e16ec755af2fa9826bd763cad9f920364f5e3c1f250b10104e1ff207d74b71c 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 General Subsection of this Subtopic, see the [General Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15, with specific qualifications noted below. #### Entities ##### [905-10-15-7](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:23616549603ddc951e84f69637dc270a58d2bfd61422f53987d5edc7f3db5fc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Cooperatives Subsections applies to [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."). #### Transactions ##### [905-10-15-8](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:0bcdb498d02fa3d68cb3991af532abe2acc6b00e8f3c47e8daf5416208b7024d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Cooperatives Subsections applies to the following transactions and activities: 1. a Accounting by agricultural cooperatives for 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."). ### Cooperatives—Patrons #### Overall Guidance ##### [905-10-15-9](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:47f9170d8990b277cbeb4dc953a603456f517ddd0db04ee1dff3352b2bd72e3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives—Patrons Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see the [General Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15, with specific qualifications noted below. #### Entities ##### [905-10-15-10](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:fea1f4fdba07b2dcbd0a16f3e7f799d48daf03afc58805b851ed21ad4f2bca1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Cooperatives—Patrons Subsections applies to [agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter.") that are [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.") 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."). #### Transactions ##### [905-10-15-11](https://asc.understandingaccounting.org/asc/905/10/#905-10-15-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:44.157Z to 2026-09-10T02:08:44.157Z Record version: sha256:e500af48c354fade6587b44ce5abfc3f2131eda8501b1e314ebc15b5ce0c7adb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Cooperatives—Patrons Subsections applies to the following transactions and activities: 1. a Accounting by patrons for product deliveries to cooperatives 2. b Accounting by patrons for investments in and income from cooperatives.