Agriculture cost accounting


Устименко Дарья Сергеевна


Экономические науки

Ключевые слова

production cost

Аннотация статьи

Cost accounting involves the techniques for as determining the costs of products, processes, projects, etc. in order to report the correct amounts on the financial statements, and assisting management in making decisions and in the planning and control of an organization.

Текст статьи

Cost accounting involves the techniques for as: 1) Determining the costs of products, processes, projects, etc. in order to report the correct amounts on the financial statements, and 2) Assisting management in making decisions and in the planning and control of an organization.

For example, cost accounts used to compute the unit cost of a manufacturer’s products in order to report the cost of inventory on its balance sheet and the cost of goods sold on its income statement. This is achieving with techniques such as the allocation of manufacturing overhead costs and through the use of process costing, operations costing, and job-order costing systems.

It assists management by providing analysis of cost behavior, cost-volume-profit relationships, operational and capital budgeting, standard costing, variance analyses for costs and revenues, transfer pricing, activity-based costing, and more. They had its roots in manufacturing businesses, but today it extends to service businesses.

For example, a bank will use cost accounting to determine the cost of processing a customer’s check and/or a deposit. This, in turn, may provide management with guidance in the pricing of these services.

Cost accounts concerned with ascertainment and control of costs. The information provided by cost-accounting to the management is helpful for cost control and cost reduction through functions of planning, decision making, and control. Initially, they confined itself to cost ascertainment and presentation of the same mainly to find out product cost.

With the introduction of large-scale production, the scope was widened and providing information for cost control and cost reduction has assuming equal significance along with finding out the cost of production. To start with cost-accounting was apply in manufacturing activities but now it applies in service organizations, government organizations, local authorities, agricultural farms, Extractive industries and so on.

Accounting for agricultural farms is the application of accounting practices to agricultural operations. The main purpose of accounting at agricultural enterprises is the analysis, interpretation and use of economic information to identify enterprise development trends, select options and make management decisions. In particular, accounting information is used at the following management levels: on-farm (in production units – primary and consolidated accounting data), general-business (for the whole farm – current accounting data, including reporting data) and the external level of agricultural production management (mainly used quarterly and annual financial statements). Also accounting performs a control function, which illustrate the implementation of the organizational plan and assess the profitability of each sector of the economy, as well as to prevent failure in work, wasteful use of resources and therefore to save enterprise funds. The objects of accounting in agriculture are:

  • property of the enterprise (fixed assets, inventories, intangible assets, financial investments, cash, etc.);
  • equity (authorized capital, additional paid-in capital, reserve capital, special purpose funds, reserves, retained earnings);
  • debt of other organizations (accounts payable, bank loans, loans);
  • business operations carried out by enterprises.

Accounting at agricultural enterprises has a number of features that reflect the specifics of the industry. This is caused by a natural factor: the production process is associated with land and living organisms, as well as a social factor – in agriculture, various organizational and legal forms of enterprises are possible

There are main features of accounting at agricultural enterprises:

  1. The main means of production in agriculture is land, so accounting for land and financial investments in them is necessary. When maintaining land accounting in agriculture, land is reflected in physical terms (hectares), in monetary terms, it shows additional (as capital) investments and purchased land.
  2. The specifics of accounting in the agricultural sector is due to the unequal nature of agricultural sectors (crop production, livestock production, auxiliary production) and the changes that occur in them (sowing, posting of crops, increase in live weight, offspring).
  3. Due to climatic factors, production is seasonal. Accounting shows the seasonality of work and costs, which affects accounting (for example, during harvesting and basic agricultural work, the volume of accounting work increases, and during a period of seasonal decrease in the volume of work decreases).
  4. Also, from one agricultural crop or cattle of the same species, several types of products are obtained. This leads to the need for cost sharing in accounting.
  5. Agricultural production is a lengthy process, sometimes it takes more than one year. For some crops and animals, costs are incurred in the current reporting year and products are received only in the next reporting year. For this reason, in accounting, costs are distinguished by production cycles that do not coincide with the calendar year: costs of previous years for the harvest of the current year, costs of the current year for the harvest of future years and costs of the current year for the harvest of the same year.
  6. Part of the products of our own production goes to on-farm consumption: plants – for seeds, feed for livestock. Livestock products – for fertilizers. Therefore, it is necessary to consider the movement of products at all stages
  7. Also, a lot of equipment is used in agricultural, so you need to keep records of all the equipment that is used in production

In addition to these factors, the organization of accounting in agriculture is influenced by the organizational and legal forms of enterprises. Agricultural enterprises can be joint-stock companies, partnerships, limited liability companies, cooperatives, unitary enterprises.

The accounting system of agricultural enterprises depends on the organization of agricultural production, the legal form and specialization of the economy, but at the same time it has common features characteristic of accounting in any sector of the national economy.

Accounting has always been a difficult task. In agriculture, its management is also accompanied by a number of problems related to the specifics of the industry. All these problems are relevant in their own way, and are associated with different aspects of agricultural activity. One of the problems is the registration of land plots of agricultural organizations. Since land is a specific factor of production, its consideration is accompanied by a number of features. Accounting is carried out in two directions. Since land is a subject of labor, it is necessary to take into account its size, the amount of land by similar fertility. Such records are maintained in physical terms – hectares.

In conclusion

Land accounting to this day remains one of the main problems in agriculture. Standards are changing and improving many enterprises strive for international standards. Russian accounting is specific in its own way, and land accounting is no exception. Even between enterprises there are differences in accounting for land, its arrival and disposal, the quantity and quality of investments in them. Therefore, it is difficult to identify the best accounting methods for their subsequent analysis. Land is such a type of fixed assets, which is very specific and even within the framework of one organization, the counted lands can be different, by fertility or by the number of investments made into it.

Список литературы

  1. About the features of accounting by agricultural organizations of fixed assets, consisting of several components, L.I. Khoruzhii, D.D. Postnikova // Accounting in agriculture. 2015. No 3. p. 13-19.
  2. Features of cost accounting and costing of production costs in canning shops of agricultural organizations, L.V. Postnikova, D. D. Postnikova // Accounting in agriculture. – 2015. – No. 10. – p. 27-36.
  3. Fundamentals of accounting and finance in agricultural production Textbook / L.V. Postnikova, A.S. Akaeva, E.A. Badmaev, D.D. Postnikova, L.V. Urazbakhtina L.V. // Tver: Priority LLC, 2016. -107 p. 18 pp.
  4. The value of valuation as an element of the accounting method D.D. Postnikova // Development of the accounting, analytical and financial system of the agro-industrial complex Interregional collection of scientific works / Under the scientific editorship of prof. L.I. Khoruzhiy. M.: Publishing House of the RSAU-MSHA, 2012 – 211 p., P. 17-20.
  5. Improving the accounting of inventories of milk processing enterprises L.V. Postnikova, A.V. Feoktistova et al. // Moscow: Scientific Consultant Publishing House, 2017. 135 p.



Устименко Д. С. Agriculture cost accounting // Технологии, образование, наука: стратегия прорыва : сборник научных трудов по материалам Международной научно-практической конференции 6 мар. 2020г. Белгород : ООО Агентство перспективных научных исследований (АПНИ), 2020. С. 15-17. URL:

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