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Consolidated Financial Statements

Summary

Farm and ranch business statements are unique in that personal and other non-farm income, assets and liabilities are often comingled with the business items. In addition, very few farm and ranch businesses use accrual accounting; rather, they report on a cash basis and adjust for accrued items. Several issues have been identified, which require special attention when preparing farm or ranch financial statements. These are: Defining personal and business assets and liabilities Non-farm income Withdrawals Credit card debt Savings and investments This fact sheet will examine the five issues noted above. The methods used to identify and account for these items should be consistent for the reporting entity from year to year, and should be comparable to other farm or ranch businesses that use combined personal and business financial reporting.