per-unit retains

ASC 325-905 governs how agricultural cooperatives account for investments in other cooperatives and how patrons (members) account for their investments in a cooperative. The core rule is that these nonmarketable long-term investments are carried at cost — including allocated equities and per-unit retains recorded at face value — rather than as equity securities, with the equity method of ASC 323-10 applied only in the infrequent case where the investor's share of the investee cooperative's unallocated retained earnings is material. Carrying amounts must be written down when the patron cannot recover full carrying value, and undistributed retains are classified as noncurrent.

ASC 405-905 governs liabilities of agricultural entities, with Cooperatives Subsections addressing how agricultural cooperatives account for product deliveries from patrons. When a pooling marketing cooperative's board assigns amounts to unprocessed products received from patrons, those assigned amounts must approximate estimated net realizable value and are credited to amounts due patrons, creating a short-term liability. Excess of pool revenues over assigned amounts and operating costs is paid or allocated to patrons pro rata, and retained allocated equities may be mandatorily redeemable instruments requiring liability classification under Subtopic 480-10.

This Subtopic governs how entities in the agricultural industry — principally agricultural cooperatives — classify and present equity. Its core rule is that cooperative earnings are split between patronage source earnings (from transactions with or for patrons) and nonpatronage earnings, and that allocated equities such as retained patronage allocations and per-unit retains are presented as equity when they have no fixed maturity date and are subordinated to all debt. Unallocated nonpatronage earnings are classified as retained earnings, and allocated equities become current liabilities only when the board formally acts to revolve them.