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

2. 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

3. 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.

4. 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

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

6. 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Items that have a useful life of more than one year and lose value because of age, wear or becoming out-of-date due to technological advancements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

7. 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