Agricultural Accounting Standardization

The Canadian Farm Business Management Council (CFBMC) recognized a need for standardization of agricultural accounting practices. In response to this need CFBMC in conjunction with representatives from the accounting profession, farm management specialists, farm organizations, and lending agencies has been working on the development of model financial statement for major farm commodities. Presently, comparability of farms and bench marking performance factors is challenging because accountants use a wide variety of presentation styles. While professional accountants are bound by GAAP (Generally Agreed Accounting Principles) and the guidelines contained in the Canadian Institute of Chartered Accountants Handbook, statements are often qualified to the extent that historic cost information has been used for capital assets and estimated market values used for inventory items. The development of a series of model financial statements was prioritized with DAIRY being the first. It was chosen because it combined challenges which are inherent in a combination of the other sectors. The other model statements in order of anticipated publication are GRAINS & OILSEEDS; BEEF COW&BEEF FEEDER, POULTRY, SWINE, & HORTICULTURE. The Canadian Institute of Chartered Accountants has been contracted to publish and market the model statements cooperatively with the CFBMC.