2026 Volume 64 Issue 2 Pages 11-24
In economic entities, the production and accounting periods often do not coincide. In addition, not all products are sold during the accounting period. As a result, many products are unfinished or unsold at the end of the accounting period. In industry bookkeeping, these products are often treated as inventories.
Even in agricultural business entities, unharvested and unsold agricultural products also remain at the end of the accounting period. However, recent agricultural bookkeeping studies have proposed accounting treatments for these products that differ from those used in industry bookkeeping. Many previous studies have proposed decomposing the value of unharvested and unsold agricultural products at the beginning of the next accounting period and transferring them to cost accounts. Therefore, unharvested and unsold agricultural product accounts are classified as deferred and accrued accounts.
This study aims to examine the appropriateness of these special accounting treatments. The main results are as follows:
1. Carrying over the valuation of unharvested and unsold agricultural products to the next accounting period is a natural way to match revenues and expenses. However, the principle of matching revenues and expenses is not a rational logic for re-decomposing and re-transferring the value of unharvested and unsold agricultural products.
2. Unharvested and unsold agricultural products are clearly inventories and considering them as prepaid expenses or receivables has no theoretical basis.
3. Treating unharvested and unsold agricultural product accounts as deferred and accrued accounts has no practical effect, and production costs may not be accurately measured.
4. The system of agricultural bookkeeping has remained underdeveloped, warranting the more appropriate system.
