ACC 310 case 1 coreection
FASB Accounting Standards Codification Case 1
ACC 310 – Section 2
1. The topic number that addresses the accounting for agricultural production activities in the FASB Accounting Standards Codification is, FASB ASC 905. The title of this topic is Agriculture.
2. Entities that must apply the guidance contained in topic FASB ASC 905, are noted in FASB ASC 905-10-15-3, “The Agriculture Topic provides guidance for all entities in the agricultural industry, including agricultural producers and agricultural cooperatives.” According to FASB ASC 905-10-15-4, the following entities would not apply the guidance in this topic: a. Growers of timber
b. Growers of pineapple and sugarcane in tropical regions
c. Raisers of animals for competitive sports
d. Merchants or noncooperative processors of agricultural products that purchase commodities from growers, contract harvesters, or others serving agricultural producers.
The Red Hen Company produces, processes, and sells fresh eggs. The guidance in this topic would apply to The Red Hen Company according to FASB ASC 906-10-05-1 “Operating poultry and egg production facilities” is listed as one of the examples of the entities that follow the guidance in this topic.
3. FASB ASC 905-360-30-4 describes the type of animal that the egg-laying flock would be categorized as: The production costs of chickens raised for an egg-laying unit shall include the initial cost of the birds (or, if hatched, the costs of eggs and hatching expenses), the costs of materials and labor, and allocated indirect costs during the prematurity period. 4. According to FASB ASC 905-330-25-3, a flock of egg-laying hens are classified on the balance sheet as follows: Animals with short productive lives, such as poultry, may be classified as inventory. Due to the short productive life of poultry, the cost of flocks may be classified as inventory. The accounting principles for poultry operations are much the same as those for
ACC 310 – Section 2
1. The topic number that addresses the accounting for agricultural production activities in the FASB Accounting Standards Codification is, FASB ASC 905. The title of this topic is Agriculture.
2. Entities that must apply the guidance contained in topic FASB ASC 905, are noted in FASB ASC 905-10-15-3, “The Agriculture Topic provides guidance for all entities in the agricultural industry, including agricultural producers and agricultural cooperatives.” According to FASB ASC 905-10-15-4, the following entities would not apply the guidance in this topic: a. Growers of timber
b. Growers of pineapple and sugarcane in tropical regions
c. Raisers of animals for competitive sports
d. Merchants or noncooperative processors of agricultural products that purchase commodities from growers, contract harvesters, or others serving agricultural producers.
The Red Hen Company produces, processes, and sells fresh eggs. The guidance in this topic would apply to The Red Hen Company according to FASB ASC 906-10-05-1 “Operating poultry and egg production facilities” is listed as one of the examples of the entities that follow the guidance in this topic.
3. FASB ASC 905-360-30-4 describes the type of animal that the egg-laying flock would be categorized as: The production costs of chickens raised for an egg-laying unit shall include the initial cost of the birds (or, if hatched, the costs of eggs and hatching expenses), the costs of materials and labor, and allocated indirect costs during the prematurity period. 4. According to FASB ASC 905-330-25-3, a flock of egg-laying hens are classified on the balance sheet as follows: Animals with short productive lives, such as poultry, may be classified as inventory. Due to the short productive life of poultry, the cost of flocks may be classified as inventory. The accounting principles for poultry operations are much the same as those for