Using the Standards in an Accounting Firm Ben Romine, EA, MBA
The Romine Group CPA Firm • • • Firm started in 1983 Consists of 9 employees 65% of client base is Ag or Ag-related Located in Columbia City, IN Service Northeast Quarter of the state
Working with producer • • • Enterprising – Livestock/Grain – Individual location – Commodity – Field – Other ventures Cost analysis – Cost of production – Cost per acre – Historical comparison Benchmarking projects – Peer groups – Supplier funded project – No wide spread benchmarking available Annual ratio analysis Software setup/implementation – Setup of Chart of Accounts/Profit Centers – Currently using Centerpoint/AG Check/Quick. Books/Farm Works
What a difference a year makes!
Working with Lenders • Preparation of Financial Statements under Standards for Banks • Education of non ag lenders on FFSC and importance of utilizing them • Preparation of Farm Credit Style Balance Sheet to convert cash to accrual
Using them in Tax Compliance and Planning • Historical trends • Provides data for support in audit – Recent audit of Livestock producer and Grain producer • Calculation of Deferred Tax Liability • Planning of exit strategy over time
Using the standards in long term planning • On clients that don’t have complete accrual records cash to accrual method provides a means to: – Develop valuation for buy-sells – Valuation for estate planning – Calculate cost of liquidation • Clients that have complete accrual records – Valuations are easily updated annually from these statement – Assists with decisions on expansion/contraction
Using the Council • Excellent reference guide – For footnotes and presentation – Examples of various scenarios/case studies – For training staff • The network – Other members are resources to bounce ideas off – Resources in areas of specialty that we may not have – Opportunity to network with others
Changing times
Issues/Concerns § Variation from GAAP Peer Review firms don’t always understand them § Not a standard application of standards across lending institutions(Different lenders want information in different formats) § Lack of 3 rd party benchmarking § Need for education for small-mid range producers on how to apply standards, and what they mean. § Lack of ERP software/integration with Data systems(JD Link, Trimble, Grain Systems Software)
Suggestions § Develop forum/discussion board for members § Develop benchmarking platform § Cliffnotes guide for producers § Farm Financials Standards University(Maybe addressed by Ag. Fate) § Information similar to what was provided on FFSC site regarding drought silage
Questions/Comments Contact Info: The Romine Group CPA Firm 662 Countryside Drive Ste 105 Columbia City, IN 46725 260 -244 -7120 -Phone 260 -244 -4626 -Fax www. rominegroupcpas. com
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