| In recognition of the diverse accounting practices employed in the agricultural industry, the AICPA issued two documents to address this issue. In 1985, the Accounting Standards Division issued Statement of Position 85-3 "Accounting by Agricultural Producers and Agricultural Cooperatives," and in 1987, the Agribusiness Special Committee issued the Audit and Accounting Guide, "Audits of Agricultural Producers and Agricultural Cooperatives." In addition, the American Bankers Association issued recommendations in 1990 concerning farm financial reporting. A goal of these documents was to increase the standardization of farm financial statements according to generally accepted accounting principles.;The abstract nature of the guidelines applicable to the preproductive costs of perennial fruit and nut crops allows for various interpretations and applications of these guidelines from both a financial and tax accounting perspective. The objective of this study was to identify and document accounting practices employed in the agricultural industry to further the standardization of financial statements prepared in conformity with generally accepted accounting principles, and to clarify the parameters for income tax reporting purposes.;To accomplish this objective, a survey instrument was developed to identify the manner in which accounting practitioners interpret and apply the accounting guidelines. The survey sample was drawn from CPAs (1) who practice in a state that produces a significant fruit and nut crop, (2) who are members of the AICPA, and (3) whose AICPA membership profile indicates that they are employed in public accounting or industry and report an interest in agriculture.;The findings of the study indicate that a significant level of diversity exists not only among the responses given by the respondents, but also between their responses and the accounting guidelines. These findings have implications for the authoritative groups that establish accounting guidelines for the agricultural industry and the users of agricultural financial statements. Recommendations are made concerning the need to revise the accounting guidelines to explicitly define acceptable accounting parameters applicable to perennial fruit and nut production. |
