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Farm Financial Standard Council Case : John and Mary Farmer

Accounting of farm is a blurred affair , there has not any standard which is commonly practiced and adhered to . This farm financial crisis brought this lack of accounting standards to focus in 1980 and to fill this need the formation of Farm Financial Standards Council ' took place which brought out its first set of guidelines , in 1991 , for accounting the agriculture produce

The process of perfecting the farm accounting standards leading to introduction of management accounting procedures in farm businesses is continuously

progressing as farm has to be managed better to make it profitable to survive

Crops have several usages , like soybean can be grown for animal feed to be consumed at farm or it can be sold as an oilseed grain . It is feed for livestock and in other situation it is an accounting profit center

Farm equipment is equally complex cost of transport equipment can be charged as input cost for producing crop , it can be hire out thus a profit center having altogether dissimilar influence on crop costs

FFSC is creating fundamental concepts like sound table of accounts for getting financial information , to make it a robust enterprise to manage it , by considering cost or profit centers . A farm should have clear accounting system as it is a complex business and also needs huge capital . The management accounting techniques suitable for use in farm accounting as discussed in case study 1 of Farm Financial Council Management Accounting titled...