Farm accounting standardization manual : a manual of farm accounting terminology, reporting policies, and ratios to enhance sound farm management practices

116 Pages·1991·6.1 MB·English

by  Farm Credit Corporation Canada. Farm Accounting Standardization Review Committee

ARM
ACCOUNTING
DARDIZATIOM
MAMUA
A MANUAL OF
F.
ACCOUNTING TERMINOLOGY
REPORTING POLICIES,
,/VD RATIt
The Farm Accounting
Standardization
Review Committee

F
ARM
ACCOUNTING
STANDARDIZATION
MANUAL
A MANUAL OF FARM
ACCOUNTING TERMINOLOGY,
REPORTING POLICIES,
AND RATIOS
The Farm Accounting
Standardization
Review Committee
Catalogue Number CC213-5/1991E
ISBN 0-662-18883-7
Published by the Farm Accounting Standardization Review Committee
do Research and Planning Division
Farm Credit Corporation
434 Queen Street
Ottawa, Ontario
Canada
K1P6J9
Telephone [phone]
Fax [phone]
Numero de catalogue CC213-5/1991F
ISBN 0-662-96903-0
Public par le Comite d*uniformisation de la comptabilite agricole
a/s la Division de la recherche et de la planification
Societe du credit agricole
434, rue Queen
Ottawa (Ontario)
Canada
K1P6J9
Telephone [phone]
Fax [phone]
FARM ACCOUNTING STANDARDIZATION MANUAL
A MANUAL OF FARM ACCOUNTING TERMINOLOGY,
REPORTING POLICIES, AND RATIOS
TO ENHANCE SOUND FARM MANAGEMENT PRACTICES
Prepared By
DELOITTE & TOUCHE
Prepared for
FARM ACCOUNTING
STANDARDIZATION REVIEW COMMITTEE
May, 1991

TABLE OF CONTENTS
FOREWORD
1
INTRODUCTION 3
1.0 FINANCIAL STATEMENTS 9
Introduction 9
1 .1
1 .2 Importance of Financial Statements 9
1 .3 The Financial Reporting Entity 9
1 .4 Types of Financial Statements 10
Balance Sheet 10
1 .4.1
1 .4.2 Statement of Income 11
1 .4.3 Statement of Owner's Equity 12
1 .4.4 Statement of Changes in Financial Position 16
1 .5 Relationship of Financial Statements 16
2.0 DEFINITIONS 19
3.0 REPORTING POLICIES 45
4.0 RATIOS 61
APPENDICES
Appendix - Example Financial Statements
I
Appendix II - Projected Cash Flow Statement
Appendix III - Key Participants
Appendix IV - List of Additional Reference Sources
Index - Alphabetical and Functional
Farm Accounting
Standardization Manual Acknowledgements
ACKNOWLEDGEMENTS
The authors would like to thank those whose contribution of time and effort helped
We
create this manual. are particularly grateful to the 120 key participants across
Canada who diligently worked alongside us providing insight and ideas. The
organizations these individuals represented are listed in Appendix III.
We would also like to acknowledge the sponsor, Employment and Immigration,
Canada and the study administrators, Ontario Ministry of Agriculture and Food and
Farm Credit Corporation.
Special thanks is extended to two groups in particular who supported us behind the
scenes in an administrative role. Wendy Kardash and Diane Adshead in Edmonton
for their patience and perseverance throughout. And Diane Decoste and her staff
in Montreal for their exemplary work in translating our words and thoughts to
French.
&
Deloitte Touche
Farm Accounting
Standardization Manual Foreword
FOREWORD
Generally accepted accounting principles in Canada are formulated by the
Accounting Standards Committee of the Canadian Institute of Chartered
Accountants. In developing principles, the Committee recognizes that no rule of
general application can be phrased to suit all circumstances and that professional
judgement must be exercised in the determination of what constitutes fair
presentation or good practice in particular cases.
This Farm Accounting Standardization Manual has been developed to provide
practical and professional interpretations of accounting principles as they apply to
agricultural producers in Canada. Guidance is provided on a wide range of
accounting topics that are of specific interest to the agricultural industry. It should
be noted, however, that certain conclusions of this manual are not in accordance
with generally accepted accounting principles. These deviations have been
appropriately identified in the introduction to the manual.
The initiative in developing this comprehensive guidance is welcomed as a major
contribution to enhancing the quality of financial reporting for this important
industry sector.
John H. Denman, CA
Director, Accounting Standards
The Canadian Institute of Chartered Accountants
March, 1991