(800) 234-1111

FINPACK News

Handling Fluctuating Values of Ag Co-op Stock

by | Oct 21, 2019

Our FINPACK support team recently received this question:

“What is the proper way to handle Ag Co-op stock in a balance sheet in which the stock, such as sugar beets, changes in value from year-to-year?”

With harvest underway and the 2019 analysis soon to follow, we feel it is a good time to clarify the proper way to handle this unique situation. The problem is that this change in market values can have an effect on the analysis in FINAN, especially the net farm income since the accrual adjustments take the value change into account. To avoid this problem, you can do one of the following two options:

Preferred:

  1. Add cost (or base) values to your balance sheets and keep the cost value constant from year-to-year. All accrual adjustments work from the cost values so you can change market values without impacting earnings. It is a simple process:
    • Edit + Copy Market to Cost – copies the market values to the cost column in the balance sheet.
    • Enter the original cost (or a constant base value) of the co-op stock in the Cost column and then you can change the Market value as needed every year (it is suggested that this occurs in the ‘Other Intermediate Assets’ detail).
    • Repeat this change in the other balance sheets used in your analysis.

Alternative method:

  1. If you do not want to add cost values to your balance sheets, use this alternative method to update FINAN, which will reflect the change in the value of the stock:
    • Enter the amount of the valuation change as a Capital Purchase (or Sale), which takes the change out of the Income Statement.
    • Enter the same amount as Gifts Received (or Gifts Given) to make the cash balance.

As always, feel free to contact FINPACK Tech Support at 1-800-234-1111 x11 if you have questions on this procedure.

[ This information is always available in the FINPACK Knowledge Base ]

Latest News
2022 FINPACK Lenders Conference

2022 FINPACK Lenders Conference

The 2022 FINPACK Lenders Conference will be held in-person in 2022. Conference Information Date: December 13-14, 2022Location: Radisson Blu Mall of America - Bloomington, MN Dr. David Kohl returns to the FINPACK Lenders Conference + a full lineup of speakers. We will...

FINPACK Digest – June 2022

FINPACK Digest – June 2022

Credit scorecards, the FINPACK advanced training survey, register now for Lender training, and The FINPACK digest is published every month and links to all the FINPACK News post published in the previous four weeks. Want notifications on FINPACK news posts sooner?...

Training & Events Update

Training & Events Update

October training for Lenders, Training for Educators and Professionals, and save the date for the 2022 FINPACK Lender's Conference FINPACK Training for Lenders in October Registration is open for the next FINPACK Lender training on October 11th and 12th on the...

How to Design and Use Credit Decision Scorecards

How to Design and Use Credit Decision Scorecards

Using Credit Decision Scorecards in your credit decisioning represents a convenient way to 'filter' loan applications. By applying some basic criteria, you can quickly decide if a credit request is straightforward and can be approved or denied as is, or if it needs...