Maintaining Records in the Animal Industry Objective 10.01-10.02: Define the terminology used in financial record-keeping systems, such as asset, liability, inventory, etc.

Terms to know Asset Liability Net worth Inventory Something tangible of value that a person owns Liability Debts, something that a person owes money on, etc Net worth Total assets minus total liabilities Inventory An itemized list of things owned by a business with the beginning value and depreciated value

Assets Current Non-current Items quickly converted to cash or that will be sold within 12 months Cash, checking, savings, stocks, non-depreciable inventory of crops and/or livestock, etc Non-current Items that have a useful life of more than one year Land, machinery, breeding livestock, etc.

Liabilities Current Non Current Debts that are due to be paid this year Fertilizers, feed bills, tractor and building payments, mortgages Non Current Debts not due this year Mortgages that do not include this year’s payment

Net Worth Total assets-Total liabilities Total assets Current assets + non current assets Total liabilities Current liabilities + non current liabilities

Inventory Non-Depreciable Depreciable Items that will be used up or sold within a year Feed, supplies, etc Depreciable Items that have a useful life of more than one year and lose value because of age, wear or becoming out-of-date due to technological advancements Land is NOT depreciable

Assignment Complete a net worth statement: I will pass out a list of details of your farm You will decide if these are assets or liabilities and if they are current or non current With this information you should figure out your farm’s Networth