Balance sheets

agMIS highlights Balance sheets, net worth reports

Balance sheets, net worth reports

Return

Balance sheet? Or net worth statement? In principle, the end products should be the same. Methods for creating them differ, however. A true 'balance sheet' is the net result of all the debits and credits in an accounting program, while the simplest 'net worth statement' reflects the difference between the value of 2 sets of data, i.e., 'assets' and 'liabilities'.

There are, however, no approved accounting methods for accounting for gains (or losses) in market values of assets -- a departure that's commonly required, at least in ag lending circles. And though boot-leg accounting methods are defined by some, they're generally inadequate to the real task, and beyond the accounting expertise of most non-accountant farmers.

Those are some of the reasons the agMIS system is defined as a 'net worth statement' system, though it doesn't prevent the knowledgeable accountant from tracking annual gains and/or losses as individual asset and/or liability items.

Net worth reports capabilities in agMIS include short-form and long-forms of any current or stored set of assets and liability records, as well as the illustrated example here, which evaluates increases and decreases in assets and liability categories over a period of time.