Agriculture Reference
In-Depth Information
Accountants are working on new methods of reporting fi xed assets whose value has been
drastically changed by rapid infl ation or devaluation, but most businesses still report the
purchase cost, unless otherwise noted. If Jody were seeking additional bank funding for her
business, she would be allowed to revalue the land account on her balance sheet to a more
realistic level.
Other assets (r)
A miscellaneous category called other assets accounts for any investment of the fi rm in
securities, such as stock in other private companies and bonds that are held for longer than
one year. The category also includes intangible assets, such as patents, copyrights, franchise
costs, and goodwill. Goodwill is the extent to which the price paid for an asset exceeds the
asset's physical market value, usually because of the value of the reputation established in
the market area by the previous owner. Items in the other assets category usually have a
longer life than current asset items and are generally non-depreciable in nature. In many
cases, they cannot easily be sold within the operating year or represent fi nancial resources
that the fi rm would not sell.
Plate 9.2
Farm land and farmstead
Most fi xed assets depreciate over time, but land is unique because it does not depreciate. Photo
courtesy of USDA Natural Resources Conservation Service.
