NATIONAL ACCOUNTING STANDARD

“PARTICULARITIES OF ACCOUNTING IN AGRICULTURE”

Introduction

1. This standard is developed based on EU Directives and IAS 41 “Agriculture”.

Objective

2. The objective of this standard is to prescribe the accounting and disclosure in financial

statement related to agricultural activity.

Scope

3. This standard shall regulate the accounting in agriculture and disclosure of information

in financial statements regarding the following:

1) biological assets;

2) agricultural produce;

3) costs related to the biological assets and agricultural produce.

4. This standard does not apply to:

1) land and intangible assets associated with agricultural activities (NAS “Intangible and

tangible assets”);

2) land and other tangible assets in the composition of property investment related to

agricultural activities (NAS “Investment property”);

3) products obtained from processing agricultural produce after harvesting (NAS

“Inventories”);

4) products not obtained from agricultural activity (e.g., harvesting of forest mushrooms or

berries);

5) subventions/grants (NAS “Equity and liabilities”).

Examples of biological assets, agricultural produce and products obtained after their

processing are presented in Table 1.

Table 1

Biological assets, agricultural produce and products

obtained after their processing

Biological assets Agricultural produce Products obtained from

agricultural produce processing

Basic flock of sheep Milk, wool Cheese, yarn

Basic herd of cattle Milk Butter, pressed cheese, cheese

Pigs Carcass Sausages, cured hams

Pisciculture Fish-commodity, spawn Fish products

Cereals Cereals, straw Flour, pearls cereals, combined fodder

Vegetable crops Vegetables Canned vegetables, pickles

Industrial crops grown

on plantations

Tobacco leaves, sunflower

seeds, roots

Fermented tobacco, seed oil, sugar

Perennial plantations:

- vineyard Grapes Brut wine, raw material for juices

- orchards Fruits Fried fruits, canned fruits

- trees in the forest

(forest massif)

felled trees Logs, timber

Definitions

5. The following terms are used in this standard with the meanings specified:

Agricultural activity – the management by an entity of the biological transformation and

harvest of biological assets for sale or for conversion into agricultural produce or into additional

biological assets;

A biological asset - is a living animal or plant.

Costs – resources expressed in value and used for manufacturing products and rendering

services.

Actual cost – costs actually incurred by the entity relating to entry, growth and care of

biological assets and agricultural produce.

Planned cost – costs determined under rules and regulations established by the entity

related to the entry, husbandry and care of biological assets and agricultural produce.

A group of biological assets - an aggregation of similar living animals (flock, herd) and/or

plants (plantation, seminary);

Agricultural produce is the harvested product of the entity’s biological assets;

Harvest is the detachment of agricultural produce from a biological asset and/or group of

biological assets (e.g., harvesting grapes, fruits and vegetables, seedlings out of the ground,

milking, gathering eggs) and/or the cessation of a biological asset’s life processes (e.g., cutting

trees, killing animals and birds, fishery).

Biological transformation comprises the processes of growth, production, degeneration

and procreation that cause qualitative and/or quantitative changes in a biological asset (e.g.,

growth of some crops to obtain agricultural produce, livestock to be sold or slaughtered, tree

growth to obtain wood).

General rules

6. Agricultural activity shall include two sectors:

1) plant growing – cultivation of annual and/or perennial plants, forestry, floriculture;

2) zootechnics – livestock, poultry, aquaculture, beekeeping, etc.

7. Plant growing and zootechnics is characterized by the following common particularities:

1) capacity to change – living animals and plants are capable of biological changes

(transformation) that contribute to obtaining agricultural produce and/or additional biological

assets;

2) management of change – facilitation of biological transformation by enhancing and/or

stabilizing the conditions necessary for the respective technological process to take place (e.g.,

nutrient levels set for animals and birds, term and quality for conducting works when cultivating

the agricultural crops, provision of moisture, light and temperature to the biological assets);

3) measurement of change – quantitative and qualitative measurement of the change in a

biological asset (group of biological assets). Measurement of change in quantity express the

measurement of volume of agricultural produce obtained and/or number (quantity) of additional

biological assets in quantitative indicators (e.g., cereal, fruits, viticultural production, animal live

weight gain – in kilograms; increasing the amount of wood in forestry – in cubic meters, number

of chicks, buds). Measurement of change in quality shall be expressed in qualitative indicators

(e.g., quality of animal grown – by category of fattening status; quality of grapes and sugar beet

roots – by the sugar content, grain of wheat – by the content of gluten; feed – by the protein

content).

8. Biological transformation results in the following types of outcomes:

1) change in biological assets through:

a) growth (an increase in living weight and enhancing the quality of animals and/or plants);

b) degeneration (a decrease in the weight and decrease in quality of animals and/or plants);

c) procreation (creation of additional biological assets - living animals and/or plants);

2) production of agricultural produce (e.g., cereals, vegetables, fruits, grapes, milk, wool,

eggs, honey).

9. A biological asset or an agricultural produce shall be recognized as per accrual based

accounting:

1) the entity shall control and identify the biological asset and agricultural produce as a

result of past economic facts. This criterion shall be met if the entity has ownership or other form

of control related to the biological assets and/or agricultural produce or, where appropriate, these

are marked at the entrance (e.g., in case of animals, the entity may hold the ownership if these

are marked at purchase, birth or weaning);

2) there is a justified certainty that in the future the entity will obtain economic benefits

from the use of biological assets and agricultural product. The given criterion is considered met

based on the assessment on physical attributes of the asset or product (e.g., gestation of cows,

healthy buds on the branches of perennial plants, state of seeding crops, live weight and category

related to the condition for fattening the breeding and fattening livestock);

3) The cost of biological assets and agricultural product can be determined reliably.

10. At the initial recognition, the biological assets and agricultural produce shall be valued

at initial cost that shall be determined depending on the input source as set forth in para 14 - 22,

30 - 32 and 39 of this standard.

11. During the reporting period, according to the accounting policy, the biological assets

and agricultural produce can be valued at the planned cost by adjusting it to the actual cost at the

reporting date.

12. According to the accounting policy, the entity may assess biological assets and

agricultural produce at fair value less costs of sale according to the general rules set out in IAS

41 “Agriculture”.

Accounting for biological assets

13. Depending on the duration of obtaining economic benefits and preparation for use as

per the destination, the following are distinguished:

1) Long-term biological assets - mature biological assets, which ensure multiple

agricultural produce and/or additional biological assets during a period exceeding one year (e.g.,

vineyards, orchards, plantations of fruitful berries, perennial crops of flowers, forages,

vegetables, cattle, sheep, pigs, adult horses) and immature biological assets that are in

preparation for use by purpose (e.g., planted vineyards and orchards, until their transfer to the

category per harvest product);

2) Current biological assets - growing and fattening animals including some groups of

mature biological assets (e.g., rabbits, fur animals, adult birds) and immature, like young animals

(e.g., calves, piglets, lambs) and discarded basic animals in the herd (flock) and transferred to the

fattening.

Long-term biological assets

14. Composition and method of determining the initial cost of the long-term biological

assets shall be conditioned on the entry source of these assets, including:

1) at the purchase of fertile perennial plantations and animals to supplement the core herd

(flock) - value of purchase and acquisition costs (e.g., costs of transport, accompanying the

animals, marking and identification, assessment, insurance, feed on the road, customs duty, the

fee for customs procedures);

2) at the transfer of young animals reared within the entity into the core herd (flock), if the

destination of their growth on initial recognition was not determined, or if there is the decision to

increase the sale and/or slaughter - the actual cost of animals at the start of reporting period and

planned cost related to their growth since the beginning of the reporting period until the transfer;

if the entity uses only the purchased feed - actual cost of animals;

3) when transferring the perennial plantations into the category of harvest product or up to

intercourse the crowns (for the strips to protect the forest, forest massifs):

a) actual costs related to sub-soiling, seedlings, planting, plus the costs of growing and

caring for plantations in the first year and in subsequent years with the cumulative total up to

their commissioning;

b) the cost of seedlings, works related to planting, growing and caring for perennial

plantations when removing gaps caused by exceptional events shall be recognized as current

expenses.

15. Costs of planting, growing and care for perennial plantations before transferring to the

harvest product shall be accounted for as an increase in long-term biological assets in progress

and diminution of inventories, costs of ancillary activities, indirect production costs, increase in

current liabilities and depreciation of intangible and tangible assets, etc.

16. The cost of products (fruits and grapes) obtained in the perennial plants (immature

biological assets) during growth and care until their transfer to the harvest product category shall

be evaluated according to the accounting policies as per one of the following methods:

1) net realizable value;

2) actual cost.

17. When assessing the products at net realizable value, the cost shall be calculated as the

difference between the market price and the likely costs of trading and shall be recorded as an

increase in inventories and decrease in long-term biological assets in progress.

Example 1. In 201X, an entity planted 38,340 cuttings of grape vines at the cost of MDL

526,500 over an area of 15 ha. The care costs in the first year of vegetation – MDL 120,000. At

the end of 201X, due to the weather conditions, 3,067 cuttings were found dried, which were

replaced in spring 201X +1 at the cost of MDL 41,000. The costs of the replacement of these

cuttings were of MDL 7,210. The care and growing costs of the subsequent years (201X +2 -

201X + 5) before transferring into operation of the vineyard were MDL 320,000. The market

value of grapes harvested in the years 201X + 4 - 201X + 5 is equal to MDL 65,000, the likely

costs of selling the grapes harvested – MDL 4,000. The vineyard was transferred to the category

of harvest product in 201X + 6.

According to the data in the example, the entity accounts:

in 201X:

- the cost of planting material in the amount of MDL 526,500 - as an increase in long-term

biological assets in progress and diminution of inventories;

- costs of planting, growing and care in the first year of vegetation in the amount of MDL

120,000 – as an increase in long-term biological assets in progress and decrease in inventories,

increase in current liabilities and depreciation of intangible and tangible assets;

in 201X +1:

- the cost of dry cuttings and costs related to their growth and care amounting to MDL

51,717 [(MDL 526,500 + MDL 120,000) × 3,067 units: 38,340 units] - as an increase in current

expenses and decrease in long-term biological assets in progress;

- the costs of the removal of the dried cuttings worth MDL 48,210 (MDL 41,000 + MDL

7,210) – as an increase in long-term biological assets in progress and decrease in inventories,

increase in current liabilities and depreciation of intangible and tangible assets;

in years 201X +2 - 201X + 5:

- costs of growth and care for the vineyard worth MDL 320,000 – as an increase in long-

term biological assets in progress and decrease in inventories and decrease in the cost of

ancillary activities, increase in current liabilities and depreciation of tangible and intangible

assets;

- the cost of grapes harvested in the amount of MDL 61,000 (MDL 65,000 - MDL 4,000) –

as an increase in long-term biological assets in progress and decrease in inventories;

in 201X + 6:

- initial cost of vineyard transferred into the category of harvest product amounting to

MDL 901,993 (MDL 526,500 + MDL 120,000 + MDL 41,000 + MDL 7,210 + MDL 320,000 -

MDL 51,717 - MDL 61,000) - as an increase in long-term biological assets and decrease in long-

term biological assets in progress.

18. When applying the actual cost method, the cost of goods shall be determined in

accordance with the degree of maturity (the level of production capacity) of the perennial crop

plantations in the year of harvest, which includes the sum of the direct costs of harvesting and

transporting the fruit, grapes and the share of care cost of growth and care for the perennial crops

in the year of harvest. The actual cost of the products obtained during the growing and care for

these plantations until their transfer to the category of harvest product shall be accounted for

similar to the rule set out in para 17 of this standard.

Example 2. Using the data from Example 1, let us suppose that, in the year 201X+4 of

vegetation, the entity has harvested grapes - 15 q, and in 201X + 5 - 20 q from an area of 1 ha.

The direct costs on picking, sorting, loading and transporting the grapes in 201X + 4 – MDL

8,100 and in 201X + 5 – MDL 10,400. The care and growth costs of vineyard in 201X +4 is

MDL 80,000, and in 201X + 5 – MDL 86,000, the production capacity of the vineyards

estimated by the entity is of 80 q/ha.

Based on data from the example, the maturity degree of the vineyard (level of production

capacity) is as follows:

- In 201X + 4: 0.1875 (15 q: 80 q);

- In 201X + 5: 0.25 (20 q: 80 q).

Actual cost of grapes harvested is:

- In 201X +4: MDL 23,100 (MDL 8,100 + 0.1875 × MDL 80,000);

- In 201X + 5: MDL 31,900 (MDL 10,400 + 0.25 x MDL 86000).

Under this method, the entity measures:

- grapes harvested during the growing and care for the vineyard in the amount of MDL

55,000 (MDL 23,100 + MDL 31,900);

- the initial cost to the plantation of grape-vine transferred to the category of harvest

product (mature long-term biological assets) amounting to MDL 907,993 (MDL 526,500 + MDL

120,000 + MDL 41,000 + MDL 7,210 + MDL 320,000 - MDL 51,717 - MDL 55,000).

The accounting records are similar to those of Example 1.

19. Long-term immature biological assets purchased to complement establishment of the

core herd (flock) shall be accounted as follows:

1) the purchase value and acquisition costs of the immature biological assets - as an

increase in long-term biological assets in progress and diminution of inventories, costs of

ancillary activities and increase in current liabilities, etc.;

2) the cost of growth and care of the biological assets in preparation for use as per

destination - as an increase in long-term biological assets in progress and diminution of

inventories, costs of ancillary activities, increase in current liabilities and amortization of

intangible and tangible assets, etc.;

3) the products obtained from the long-term biological assets in progress evaluated

according to accounting policies – as an increase in inventories and decrease in long-term

biological assets in progress;

4) the initial cost of immature long-term biological assets transferred into the category of

mature (in operation) - as an increase in long-term biological assets and decrease in long-term

biological assets in progress.

20. Labor and production animals, vineyards and orchards, berries plantations received

from owners in the form of equity participation shall be accounted for as an increase in long-

term biological assets and decrease in unpaid capital or increase in nonregistered capital.

21. Long-term biological assets, such as forage perennial crops (e.g., alfalfa, clover,

sainfoin), flowers (e.g., tulip, gladioli, peony, lily, hydrangea, lavender, camellia, lilac, narcissus,

lily), vegetable (e.g., lovage, sorrel, horseradish, rhubarb, asparagus), strawberry, strawberry etc.

in preparation for service shall be included in the composition of long-term biological assets in

progress subsequently being transferred to the category of mature long-term biological assets.

22. Mature long-term biological assets (e.g., vineyards, orchards, berry plantations,

working animals - horses) and those referred to in para 21 of this standard shall be subject to

depreciation according to the general rules set out in NAS “Intangible and tangible assets”.

23. After initial recognition, the long-term biological assets shall be valued at the initial

cost less accumulated depreciation and accumulated impairment losses in accordance with the

general rules set out in NAS “Intangible and tangible assets” and Impairment of assets”.

24. When purchasing land with plantations at a single price, this shall be distributed under

the bases set in accounting policies. Trellis in vineyards and orchards are a separate object of

property. When installing them in the first year of establishment of perennial plantations, the

trellis depreciation amount shall be calculated and assigned:

1) before the transfer of the vineyard and/or orchards in bearing category – at their growing

care costs, and shall be accounted for as a concomitant increase in long-term biological assets in

progress and depreciation of tangible assets;

2) after transferring the vineyard and/or orchards into the bearing category - the cost of

their care and growth and shall be accounted for as a concomitant increase in costs of core

activities and depreciation of tangible assets.

25. The disposal of long-term biological assets occurs in the case of: sale, transfer for free

to third parties or under financial lease, transmission as equity participation in other entities,

expiry of useful life, when the subsequent operation is impossible or ineffective, change of the

land use, animal slaughter, discarding animals in the core herd (flock), exceptional events etc.

26. Operations related to the disposal of long-term biological assets except slaughter,

discarding and cassation of animals due to exceptional events shall be accounted for in the same

way as for other fixed assets under the general rules set out in NAS “Intangible and tangible

assets” and NAS “Equity and liabilities” as follows:

1) settlement of accumulated depreciation - as a concomitant decrease in depreciation of

long-term biological assets and biological assets;

2) cassation of the carrying value - as an increase in current expenses and decrease in long-

term biological assets;

3) recording the expenses related to the disposal of the long-term biological assets - as an

increase in current expenditure and reduction of costs of ancillary activities, inventories, increase

in current liabilities, etc.;

4) recording the sale value (contractual) of the long-term biological assets – as a

concomitant increase in cash, receivables and current revenue.

27. Slaughtering of animals from the basic herd shall be accounted for as follows:

1) Cassation of the carrying amount of animals - as an increase in the costs of core

activities and decrease in long-term biological assets;

2) costs of slaughter - as an increase in costs of core activities and decrease in inventories,

increase in current liabilities and depreciation of tangible and intangible assets, etc.;

3) products obtained from slaughter – as an increase in inventories and decrease in the cost

of basic activities.

28. The production and work animals discarded from the core herd and transferred to the

category of long-term biological assets for fattening shall be valued at carrying value and

accounted for as an increase in inventories and decrease in long-term biological assets.

29. The carrying amount of long-term biological assets (e.g., orchards, vineyards,

plantations of fruit trees, cattle for work and production) affected by exceptional events (e.g.,

hail, floods, frosts, drought, diseases) shall be settled in part or fully and shall be accounted for

as an increase in current expenses and decrease in long-term biological assets.

The accounting for the operations of long-term biological assets disposal due to

exceptional events is presented in Annex 1.

Current biological assets

30. On initial recognition, the current biological assets shall be valued at the initial cost

that is determined depending on the entry source:

1) biological assets purchased, received free of charge etc. – at the initial cost that contains

the entry value (contract) and acquisition costs under the general rules set out in NAS

“Inventories”;

2) products registered by the entries obtained as a result of transformations of mature

biological assets:

a) calves, lambs and kids – at the planned cost (set) of a head on the day of calving;

b) piglets – at the planned cost (set) of a hundredweight of live weight of piglets weaned,

given their live weight at birth;

c) colts (under age of one day) from work mares – at the planned cost (set) of forage 60

days needed to maintain an adult traction animal;

d) young animals with fur (aged 15 days) – at planned cost (set) at forage 90 days needed

to maintain a mature animal;

e) rabbit pups (aged 15 days) – at planned cost (set) of one head calculated at weaning,

considering the live weight;

f) hen chicks, ducks, goslings, turkey chicks (aged 24 hours) – at the planned cost (set) of a

head according to calculation of incubation;

g) bee families - at net realizable value of a family;

h) larvae and juvenile fish – at the planned cost (set) of one unit of calculation;

3) The offspring of rabbits, lambs weaned – at the planned cost (set) of a hundredweight of

live weight gain determined by selective weighing;

4) animals received in higher age group being transferred from the lower age group – at the

actual cost of the animals at the beginning of the reporting period and the planned cost related to

their growth since the beginning of the period until the transfer;

5) increase in live weight obtained after rearing and fattening animals – at the planned cost

(set) of a hundredweight of live weight gain multiplied by the number of quintals of live weight

gain of the animals of the respective age group;

6) growth (increase in maintenance costs) of foals, young animals that do not weigh, furry

animals – at the planned cost (set) of a day of care and the number of days of care. The weight

gain and increase in the maintenance cost of live rabbits, fur animals, and mature birds shall not

be calculated. The maintenance costs related to the above mentioned assets shall be reported at

costs of products obtained (poultry and rabbits, eggs, etc.) or current expenses – in case of their

sale.

31. On the reporting date, the planned cost of current biological assets indicated in para 30

of this standard shall be adjusted until the actual one by settling the deviations with normal

accounting records or cancellation.

32. Maintenance costs of biological assets shall be assessed with the cumulative total to the

actual amount. On the reporting date, the unsettled costs shall be recorded as an increase in

production in progress and decrease in main activity costs.

33. Subsequent to initial recognition, during the reporting period, the current biological

assets shall be valued at their entry cost adjusted (increased/decreased) by the planned cost of the

addition of live weight and/or maintenance costs of these assets, and on reporting date - at the

lower of cost and net realizable value in accordance with the general rules set out in NAS

“Inventories”.

In this case, the entity accounts:

1) the planned cost of the addition of live weight – as an increase in inventories and

decrease in costs of core activities;

2) deviation of the actual cost from the planned cost – as a concomitant adjustment

(decrease/increase) of inventories and costs of core activities.

Example 3. In April 201X, an entity registered the entry of 4 calves in the herd base of 122

kg live weight at planned cost of MDL 1,952. During the year (9 months), 648 kg of live weight

addition was registered, the planned cost of MDL 10,368. On 31 December 201X, the planned

cost of calves was MDL 12,320 (MDL 1,952 + MDL 10,368). On 31 December 201X, the actual

cost of 1 kg of body weight of the given biological assets group was determined in the amount of

MDL 15, and live weight of calves - MDL 11,550 (MDL 15 × 770 kg), where 770 kg = 122 kg +

648 kg. The amount of deviation of the actual cost from the planned cost was MDL 770 (MDL

11,550 - MDL 12,320). At the reporting date, the net realizable value of these calves was MDL

10,600.

According to the example data, the entity accounts:

In April 201X:

- planned cost of four calves weighing 122 kg worth MDL 1,952 – as an increase in

inventories and decrease in the costs of core activities;

In April-December 201X:

- the planned cost of the addition of 648 kg of live weight of calves worth MDL 10,368 –

as an increase in inventories and decrease in the costs of core activities;

On 31 December 201X:

- deviation of actual cost of calves from the planned cost in the amount of MDL 770 – as a

reversal of the inventories and cost of core activities;

- the difference between the actual cost of current biological assets and net realizable value

amounting to MDL 950 (MDL 11,550 - MDL 10,600) – as an increase in current expenses and

decrease in inventories.

34. Transfer of the current biological assets from a lower age group in a group of upper age

shall be accounted for at carrying value - as an internal movement in inventories.

35. Disposal operations (sales, transmission as equity participation, free of charge, etc.)

related to the current biological assets shall be accounted for in the same way as other disposals

according to the general rules set out in NAS “Inventories”.

36. Slaughter of the current biological assets shall be accounted for as follows:

1) the carrying value of long-term biological assets slaughtered - as an increase in costs of

core activities and decrease in inventories;

2) costs of slaughter - as an increase in costs of core activities and decrease in inventories,

increase in current liabilities and depreciation of intangible and tangible assets etc.;

3) cost of products obtained from slaughter - as an increase in inventories and decrease in

core activities costs.

Accounting for agricultural produce

37. Agricultural produce shall include:

1) basic agricultural produce - products for the production of which the biological asset or

group of biological assets (e.g., cereals, fruits, grapes, roots, milk in calving for milk, and meat)

were created or acquired;

2) combined (coupled) agricultural produce - two or more basic types of agricultural

produce obtained from a biological asset or group of biological assets as a result of one and the

same transformations (e.g., green mass, seeds and grasses of annual and multiannual herbals,

milk and wool from the basic flock of sheep, honey, propolis and beeswax in beekeeping). In

animal husbandry, concomitantly with the combined agricultural produce, additional biological

assets can be obtained (e.g., basic flock lambs, new swarms of bees in beekeeping);

3) secondary products - products obtained concomitantly with the core products from a

biological asset (group of biological assets), but having a secondary importance (e.g., straw,

chaff and feed wastes – at the cultivation of cereal crops, cow house and bird manure – at the

maintenance of animals and birds).

38. Agricultural produce are recognized as separate assets:

1) in case of their separation from the biological assets at the point of harvest (for example,

at the time when the grains were threshed with their mass correction after cleaning, sorting and

drying, fruits, berries, vegetables, green mass, hay, as well as the seeds obtained by the entity -

during harvesting (collecting) or preparation; wool, milk, eggs, honey - while trimming, milking,

and collection);

2) the termination of the life processes of biological assets (e.g., meat – at the time of

animals and birds slaughter).

39. Agricultural produce obtained from the crop in the reporting period shall be measured

at the planned cost by adjusting it to the effective cost at the reporting date and shall be

accounted for as an increase in inventories and decrease in the costs of core activities.

The accounting for agricultural produce is exemplified in Annex 2 of this standard.

40. Agricultural produce used within the entity (e.g., seeding, feeding, processing) shall be

accounted for as an increase in costs of core activities and/or ancillary activities and decrease in

inventories. Other operations of agricultural produce output (marketing, transmission free of

charge, transmission as equity participation, etc.) shall be accounted for under the general rules

set out in NAS “Inventories”.

Accounting for costs

41. The accounting for the costs shall be kept per activities (basic and auxiliary) and

sectors (plant growing and zooculture). Within each sector, the costs shall be accounted per the

structural subdivisions and objects of record-keeping of costs (e.g., types of crops - winter wheat,

corn, sunflowers, potatoes, types and varieties of perennial plantations - seeds, stone fruits, types

and groups of biological assets - animals and birds). The nomenclature and structure of costs

items shall be determined independently by the entity under Annexes 3 and 4.

42. Depending on the way how these are included in the cost of agricultural produce and

additional biological assets, the following are distinguished:

1) direct costs;

2) distributed costs;

3) indirect production costs.

43. Direct costs of cultivation and animal husbandry are the costs directly attributable to

growing and caring for a type (group) of plants and/or animals (e.g., direct costs on wages, direct

costs of materials, services). The basic direct costs include the costs related to: annual crops

sown in spring and kept in the current reporting period; annual crops sown in autumn of the

previous reporting period and costs of growth and care for these crops in the current reporting

period; care for perennials at bearing (e.g., vineyards and orchards, plants of fruit shrubs)

recorded in the previous reporting period (plowing, cutting) after the harvesting and their care in

the current reporting period; husbandry and care of animals and birds; artificial animal breading;

incubation of eggs etc. These costs shall be accounted for as an increase in costs of core

activities and decrease in inventories, costs of ancillary activities, increase in depreciation of the

tangible and intangible assets and current liabilities etc.

44. Distributed costs are costs of the reporting period related to cultivation of several types

of crops (homogeneous crop groups) or growth of several types (groups) of animals, birds (e.g.,

depreciation and repair of fixed assets - stables, birds houses, costs of irrigation, costs related to

draining of land). These costs shall be accounted for during the reporting period with the

cumulative total increase in assignable costs of core activities and decrease in inventories, with a

concomitant increase in the depreciation of tangible and intangible assets and current liabilities

etc.

45. The distributable accumulated costs shall be distributed at the end of the reporting

period in relation to the base set by the entity (e.g., mass of clean grain - grain cleaning

machinery depreciation, the amount of fertilizer into the soil – impairment of technique for

fertilizer, sown area - depreciation seeders, seeded surface - depreciation of cultivators) and shall

be accounted for as an increase in costs of core activities in each crop (group of homogeneous

crops) and decrease in the assignable costs of core activities.

46. The direct costs and costs allocated in plant growing and animal husbandry incurred in

the current reporting period for obtaining biological assets and agricultural produce during the

subsequent reporting period, on the reporting date, shall be considered as production in progress.

The above mentioned costs shall be accounted for as an increase in costs of the core activities

and decrease in inventories, costs of ancillary activities and increase in the depreciation of

intangible and tangible assets, current liabilities etc. The basic direct and allocated costs shall be

accumulated with cumulative total from the beginning of the technological works of preparation

and processing the soil and other works and shall be attributed per items at the costs related to

the growing crops of the harvest subsequent to the reporting period as follows:

1) costs of sowing winter crops – at the winter crops related separately for the harvest of

the subsequent reporting period;

2) costs of plowing, cutting in orchards and vineyards and other autumn works - at the cost

of their care per types and species of the current reporting period for the next reporting period;

3) costs of plowing, harrowing, placing fertilizer in the soil, etc. in autumn of the reporting

period for the annual crops – at the costs of crop to be sown in the spring of the subsequent

reporting period;

4) The cost of honey left in the hive as winter food for the hives, the costs of incubation of

eggs after 11 December of the reporting period and the cost of summer fish in winter ponds – at

the costs of products and additional biological assets obtained during the subsequent reporting

period.

The costs of plowing, harrowing, placing fertilizer in the soil shall be distributed per the

crops in the spring of the subsequent reporting period and shall be accounted for as internal

movement within the costs of core activities.

Example 4. In September-October 201X, an entity recorded costs of autumn plowing of

400 hectares, totaling MDL 71,270 including:

- labor remuneration - MDL 14,000;

- contributions for mandatory social insurance and mandatory health insurance premiums

- MDL 3,570;

- Fuel - MDL 39,200;

- Maintenance of fixed assets – MDL 11,000;

- Services of ancillary activities – MDL 3,500.

In April 201X +1, the land area plowed in autumn of 400 ha was sown with the following

crops: sunflower - 80 ha, maize - 200 ha, sugar beet - 120 ha.

The entity distributed these accrued costs as follows (Table 2).

Table 2

Distribution of costs related to the plowing in autumn 201X

(MDL)

Cost item Registered

costs

Including per crops

total per 1

ha

sunflower

(80 ha)

maize

(200

ha)

Sugar

beet

(120

ha)

1 2 3 4 5 6

Labor remuneration 14,000 35.00 2,800 7,000 4,200

Contributions of mandatory state social and health

insurance

3,570 8.92 714 1,785 1,071

Fuel 39,200 98.00 7,840 19,600 11,760

Maintenance of fixed assets 11,000 27.50 2,200 5,500 3,300

Services of ancillary activities 3,500 8.75 700 1,750 1,050

Total 71,270 178.17 14,254 35,635 21,381

According to the example data, the entity accounts:

in September-October 201X:

- the costs related to the autumn plowing amounting to MDL 71,270 - as an increase in the

cost of basic activities, analytical account “Autumn Ploughing” and decrease in inventories in

the amount of MDL 39,200, costs of ancillary activities amounted to MDL 14,500 (MDL 11,000

+ MDL 3,500) and increase in current liabilities amounting to MDL 17,570 (MDL 14,000 +

MDL 3,570).

On 31 December 201X:

- Settlement of the costs of core activities amounting to MDL 71,270 – as an increase in

production in progress and decrease in the costs of core activity, analytical account “Autumn

Plowing”.

In April 201X +1:

- Costs of autumn plowing distributed to core activities amounted to MDL 71,270 - as an

increase in the cost of basic activities, including analytical accounts: “Sunflower” – MDL

14,254, “Corn” – MDL 35,635, “Sugar beet” – MDL 21,381 and decrease in production in

progress, the analytical account "Autumn Plowing” – MDL 71,270.

47. Costs of ancillary activities include the costs listed in Annex 5, which composition

shall be established by the entity by itself.

48. Indirect production costs are the costs of servicing and managing a subdivision

recorded in the production of the entity. These costs cannot be directly reporting to the cost of

some types of agricultural produce, additional biological assets, services rendered. These costs

shall be accumulated during the reporting period and subsequently distributed per objects of cost

recording. The composition of indirect costs items shall be determined independently according

to Annexes 6 and 7.

49. Indirect production costs shall be accumulated per types of activities (basic and

auxiliary) and shall be accounted for as an increase in indirect production costs and decrease in

inventories, increase in current liabilities and depreciation of tangible and intangible assets, etc.

50. Accumulated indirect production costs of basic and ancillary activities shall be

allocated according to the distribution base established in accounting policies (e.g., the total

direct cost, the amount of salary calculated, the number of hours worked by full-time workers at

the growth and care of types or groups of animals and birds, the number of days of work animals

(traction animal transport). The allocation of indirect production costs shall be accounted for as

an increase in costs of core and/or ancillary activities and decrease in indirect production costs.

51. The production costs, which did not generate agricultural produce and/or additional

biological assets as a result of natural disasters, diseases should be assessed at their actual size

related to the destroyed crops area, harvest not harvested, costs of growth and care of animals

and birds destroyed and shall be accounted for as an increase in current expenditures and

decrease in the cost of core activities.

Anticipated expenses

52. Anticipated expenses represent the costs incurred in the current reporting period but

which relate to the subsequent reporting periods (e.g., the costs of tires and batteries sent to

service, subscribing to special and regular literature).

53. Anticipated expenses shall be accounted for depending on the term of the settlement as

an increase in long-term prepaid expenses and current depreciation of tangible and intangible

assets, current liabilities and decrease in inventories, cost of core and auxiliary activities etc.

54. Anticipated expenses shall be distributed evenly to the deadline of settlement or other

basis determined in conformity with the accounting policies. The anticipated expenses shall be

accounted for as an increase in costs of core and/or auxiliary activities, current expenses and

decrease in anticipated current expenses.

Actual costing of agricultural produce

55. The actual cost of agricultural produce shall be determined at the reporting date

according to nomenclature of items established by the entity by itself according to Annex No. 3.

56. Calculating the actual cost of agricultural produce shall be preceded by preparatory

work presented in Annex 8.

57. As objects of calculation in pyrotechnics and zootechnics are the basic products,

conjugated and secondary: cereals, products of technical crops (e.g., sunflower, sugar beet, dried

tobacco), vegetable products, products of forage crops, perennials (for example, fruits, grapes,

strawberries, raspberries, currants, gooseberries), milk, wool, eggs, additional biological assets

(products), the addition of live weight, live weight of the animal.

58. Costs accrued for the growth and care for a type (group) of biological assets shall be

allocated among main products, coupled and secondary and additional biological assets,

depending on the structure and composition of calculation objects, applying one of the methods

set out in accounting policies:

1) exclusion of the cost of products valued at net realizable value or actual cost of the

collection of products from the aggregate costs or according to the norms set out in the

accounting policies – it applies to the calculation of cereal grown for stock and domestic use,

products and additional biological assets for animal husbandry;

2) ratios established by the entity: Under this method, a type of coupled product shall be

equal to a conventional unit, and other types of products shall be expressed by means of

conventional ratios/coefficients. In this way, all products shall be converted into conventional

products, subsequently, the weight of each type of conventional products in their total amount

shall be determined in relation to which the production costs shall be allocated and assigned to

each type of product – it applies to the calculation of grain products and products of annual and

perennial herbals. The costs related to the care of basic herd “Cows for milk” diminished by the

cost of secondary products shall be distributed between the volume of milking milk and calves

obtained from calving based on the coefficients 0.9 and 0.1 respectively set out in the accounting

policies of the entity;

3) in relation to the value of coupled products determined to the average market price –

shall be applied in calculating the cost of wheat seeds, honey, wax, propolis, new swarms of bees

etc.;

4) compared with quantitative expression of common features for several types of products

(e.g., nutrient content) - can be applied to calculate the cost of vegetables grown in unprotected

soil for sale or internal use, cost of fodders etc.;

5) The allocation of direct costs for each type of product and allocation of other costs

proportionally with the basis set (e.g., area harvested, the coefficients set in accounting policies)

which at their recording cannot be assigned to each object of calculation - is applied to calculate

the cost of vegetable products grown in greenhouses (protected soil) in calculating the cost of

fruit harvested in orchards on whose land they grow many kinds or ampelographic varieties etc.

6) other methods established in accounting policies.

59. The calculation of the cost of the main agricultural produce and additional biological

assets is shown in:

1) Annex 2 - for wheat grown for sale and domestic use;

2) Annex 9 - for wheat grown for seeds;

3) Annex 10 – for 1 q of milk and one calf;

4) Annex 11 – for 1 q of the addition to the live weight of young animals.

Disclosure of information

60. The entities carrying out agricultural activity shall present at least the following

information in their financial statements:

1) The carrying amount of long-term, current biological assets and agricultural produce

expressed quantitatively at the beginning and end of the reporting period;

2) The depreciation method, useful life and depreciation rates for long-term biological

assets;

3) revenues and expenses at the disposal of biological assets;

4) the type, value and the carrying amount of perennial plantations;

5) the size and value of the land occupied by annual crops;

6) the balance of biological assets (number of animals and live weight) from the previous

current reporting period and changes during these periods;

7) the volume and cost of agricultural produce, productivity as per 1 ha, for a fed cow;

8) costs that did not generate agricultural produce and additional biological assets;

9) the amount of subsidies.

Transitional Provision

61. This standard shall be applied starting with its effectiveness date.

Date of entry into force

62. This standard enters into force on 1 January 2014.

Annex 1*

Accounting for transactions related to partial deforestation of

perennials due to exceptional events

Initial data. In October 201X, an entity found that, due to flooding, the subsequent

operation of 2 ha out of 10 ha of fruitful vineyard “Cabernet – Sauvignon” became irrational.

The vineyard was received into operation on 1 January 201X-16 at the initial cost of MDL

342,000 and the trellis – on 1 January 201X-19 at MDL 272,000; residual value of the vineyard

– zero; for trellis - MDL 75,600, useful life of the vineyard - 20 years and for the trellis - 23

years. According to the entity's management decision, the area of 2 ha of vineyard was cleared

and the trellis were removed. As a result of these works, the following have been recorded:

1) The expenditures on:

- Tractor fleet services - MDL 4,780;

- labor remuneration - MDL 1,860;

- contributions for mandatory state social and health insurance premiums - MDL 493;

2) The value obtained from dismantling the pillars of trellis – MDL 10,800.

The amount of accumulated depreciation of the vineyard (at the moment of deforestation of

2 ha) is MDL 287,850, the trellis – MDL 167,225.

Indicators related to the spot of vineyard (2 ha):

a) for vineyard:

- amount of accumulated depreciation - MDL 57,570 (MDL 287,850: 10 ha × 2 ha);

- carrying value - MDL 10,830 [(MDL 342,000 - MDL 287,850): 10 ha × 2 ha];

b) for the trellis:

- the amount of accumulated depreciation - MDL 33,445 (MDL 167,225: 10 ha × 2 ha);

- non-depreciated value - MDL 5,835 [(MDL 272,000 - MDL 75,600 - MDL 167,225): 10

ha × 2 ha].

According to the example data, in October 201X, the entity accounts for the spot of

vineyard cleared (2 ha):

- Settlement of the accumulated depreciation related to the vineyard amounted to MDL

57,570 - as a decrease in depreciation of long-term biological assets and biological assets;

- Settlement of the accumulated depreciation related to the trellis to the amount of MDL

33,445 - as a decrease in the depreciation of tangible assets and tangible assets;

- Cassation of the carrying amount of the vineyard in the amount of MDL 10,830 - as an

increase in current expenses and decrease in long-term biological assets;

- Cassation of trellis non-depreciated value totaling MDL 5,835 - as an increase in current

expenditure and decrease in tangible assets;

- Recording the costs for deforestation of vineyard destroyed and trellis dismantled worth

MDL 7,133 - as an increase in current expenditure, reduction of costs of ancillary activities –

MDL 4,780 and increase in current liabilities - MDL 2,353;

- Recording the entry of usable pillars for trellis worth MDL 10,800 – as an increase in

inventories and decrease in tangible assets.

- Reflect in expenses the difference between the residual value and the value of the pillars

of trellis in the amount of MDL 4,320 (MDL 75,600: 10 ha × 2 ha) – MDL 10,800) - as an

increase in current expenditures and decrease in tangible assets;

____________________

* The nomenclatures of the cost items of basic and auxiliary production, as well as the

costs structure per items presented in Annexes have a recommendation character. These shall be

established by each entity itself, considering the peculiarities of agricultural activity carried out.

Annex 2

The accounting for grain harvest and its cost calculation

Initial data. An entity has the following data related to the growth, recording at entry and

use of winter wheat in 201X:

- Costs of growing and caring for winter wheat - MDL 395,200;

- Costs related to the area that had no harvest due to flooding - MDL 25,400;

- Unprocessed wheat obtained after threshing – 5,680 q;

- Wheat obtained after processing (drying and cleaning) – 4,945 q;

- Waste grain - 555 q;

- Unusable waste and natural reduction - 180 q;

- The share of grains in waste cereals - 38%;

- Straw chaff collected – 6,160 q;

In October 201X, out of the processed harvest, 330 q of wheat was sown for the harvest in

201X+1, in August 201X – 3,100 q was sold at a price of 300 MDL/q, the remaining wheat

remained in stock. The cereals waste used as animal feed for growing and fattening - 340 q,

straw bedding - 800 q; the rest of straw and waste fodder remained in stock.

The rate of costs of collecting, transporting and placing the stacks set by the entity is of 9%

of the costs of the products obtained.

The planned cost for 1q of raw wheat is MDL 70, waste grain - MDL 30; for straw – MDL

8.

According to the example data, the entity:

in July-October 201X accounts:

- Planned cost of products from wheat mass threshing in the amount of MDL 463,530

[MDL 397,600 (5680 q × MDL 70) + MDL 49,280 (6,160 q × 8 MDL) + MDL 16,650 (555 q ×

MDL 30)] – as an increase in inventories and decrease in costs of core activities;

- Settlement of cereal waste, unusable waste and the cost of natural deduction at the

planned cost after cleaning and drying the grain on calving worth MDL 51,450 [(555q + 180 q) ×

MDL 70] – as the reversal of the inventories and cost of core activities;

- Wheat sold at the sale price in the amount of MDL 930,000 (3,100 q × MDL 300) – as a

concomitant increase in receivables, cash and current revenue;

- Planned cost of wheat sold in the amount of MDL 217,000 (3,100 q × 70 lei) - as an

increase in current expenses and decrease in inventories;

- Planned cost of waste grain for food and straw for animal bedding worth MDL 16,600

[(340 q x MDL 30 + (800 q × MDL 8)] - as an increase in the costs of core activities, analytical

account “Costs for the growth of current biological assets” and decrease in inventories;

- Planned cost of wheat sown in autumn for the harvest of 201X 1 in the amount of MDL

23,100 lei (330 q × MDL 70) - as an increase in the cost of basic activities for the harvest of the

next year and decrease in inventories;

In December 201X, the entity determines the actual cost of the products:

- Cost of products obtained without costs related to the crops destroyed – MDL 369,800

(MDL 395,200 – MDL 25,400);

- The volume of waste cereal recalculated at the grain content - 210.9 q (555 q × 38%);

- The quantity of grain cleaned and in waste – 5,155.9 q (4,945 q + 210.9 q);

- The cost of straw collected - MDL 33,282 (MDL 369,800 × 9%);

- The cost of harvested wheat - MDL 336,518 (MDL 369,800 – MDL 33,282);

- The actual cost of 1 q of:

• winter wheat - MDL 65.27 (MDL 336,518: 5,155.9 q);

• waste grain - MDL 24.80 (MDL 65.27 x 38%);

• Straw - MDL 5.40 (MDL 33,282: 6,160 q).

Based on these calculations, the deviations between actual and planned cost of the basic

and secondary products are distributed (Table 1).

Table 1

Distribution of deviations between the effective and planned costs related to the products

obtained in 201X

Produ

cts

Harves

ted

Quanti

ty,

q

Cost 1 q,

MDL

output: Balance as of

31.12.201X Sale Sowing for

next harvest

Consumptio

n for animals

feeding and

bedding

effect

ive

plan

ned

deviat

ion

quant

ity,

q

deviat

ion,

MDL

quant

ity,

q

deviat

ion,

MDL

quant

ity,

q

deviat

ion,

MDL

quanti

ty,

q

deviat

ion,

MDL

1 2 3 4 5 6 7 =

6×5

8 9 =

8×5

10 11 =

10×5

12 13 =

12×5

Winte

r

wheat

4,945 65.27 70 (4.73) 3100 (14,66

3)

330 (1,561

)

– – 1,515 (7,166

)

Waste

grain

555 24.80 30 (5.2) – – – – 340 (1,768

)

215 (1,118

)

straw 6,160 5.40 8 (2.60) – – – – 800 (2,080

)

5,360 (13,93

6)

Total x x x x x (14,66

3)

x (1,561

)

x (3,848

)

x (22,22

0)

In December 201X, the entity accounts:

- Settlement of the costs related to the area without harvest in the amount of MDL 25,400 -

as an increase in current expenditure and decrease in costs of core activity;

- Settlement of deviations between the planned and actual cost, related to:

• wheat sold in the amount of MDL 14,663 – as a reversal of current expenses and costs of

core activities;

• wheat sown for harvest in 201X + 1 in the amount of MDL 1,561 – as a reversal of the

costs of core activities in 201X +1 and costs of core activities for the harvest of 201X;

• products used as feed and litter of young animals in the amount of MDL 3,848 – as a

reversal of costs of core activities, analytical account “Costs by increase in current biological

assets” and the costs of core activities, analytical account “Autumn Wheat”;

• products in stock as of 31.12.201X worth MDL 22,220 – as a reversal of the inventories

and cost of core activities.

Annex 3

Table 2

Nomenclature of items of core activities costs

(phytotechny and animal husbandry)

Cost item Phytotechny Animal

husbandry

1. Direct costs of materials, including: + +

a) seeds and planting + –

b) fertilizers (mineral and organic) + –

c) means of protection of plants and

animals

+ +

d) feed – +

e) other costs of materials + +

2. Direct costs on labor remuneration + +

3. State mandatory social and health

insurance contributions

+ +

4. Services + +

5. Maintenance of fixed assets + +

6. Indirect production costs + +

7. Other costs + +

Note: The symbol “+” expresses the existence of the item and the Symbol “–”

– its absence.

Annex 4

Cost items composition in phytotechny and animal husbandry

1. The item “Direct costs of materials” shall include its homogeneous components, which

shall be considered as separate items:

a) seeds and planting - the cost of seed and planting material from own production, as well

as purchased, used for this crop, additional sowing of rare crops and re-sowing of those

destroyed (in phytotechny), as well as the cost of spawn (pisciculture).

This item shall not include the following:

- The cost of seed and planting material used in planting perennial plantations (which is

attributed to the cost of growing and care of the plant in question);

- Costs of preparing the seed for sowing (loading, seed treatment with chemicals etc.),

transporting them in the field and sowing (these shall be moved to the respective type (group) of

homogeneous crops in items “Direct costs on labor remuneration”, “Mandatory state social and

health insurance contributions” , “Services”, etc.).

b) fertilizers (mineral and organic) - the cost of fertilizers, bacterial and micro-fertilizers,

as well as organic products:

- Manure, poultry manure, compost, etc. applied for the crop (crop group) in question. The

mineral fertilizers shall be reflected in natural (quantitative and recalculated in active ingredient)

and value expression, and the organic fertilizers - in quantitative and value expression.

This item shall not include the following:

- Costs of preparing fertilizers (grinding, mixing), loading them into the vehicles and

transportation in the field, loading into the fertilizer spreaders and placing into the soil (these

costs shall be included in the costs for crop (crop group) cultivation in the item on “Direct costs

on labor remuneration”, “Mandatory state social and health insurance contributions”, “Services”,

etc.).

- Costs related to the introduction of fertilizers by the specialized entities shall be included

in the item "Services";

c) means of protection of plants and animals:

- In phytotechny - the cost of pesticides, insecticides and fungicides, herbicides,

defoliators, other chemical and biological means (including costs of transport thereof) used to

control pests, weeds and diseases of agricultural plants.

This item shall not include the costs for preparation, loading, processing seed and

protection of crops and perennial plantations with the mentioned means (spraying, pollination,

drainage, defoliators, etc.) at the execution of such works (which include the items “direct costs

on labor remuneration”, “Mandatory state social and health insurance contributions”, “Services”,

etc.).

- In animal husbandry - the cost of biological preparations, medicines, disinfectants.

This item shall not include other costs related to disinfection of stables, prophylaxis and

treatment of animals and birds that are reflected in the items “Direct costs on labor

remuneration”, “Mandatory state social and health insurance contributions”, "Services” in the

execution of these works;

d) feed - cost of feed from own production and purchased (in beekeeping - honey, sugar),

used for feeding cattle, poultry and bees. Feed from own production consumed during the

reporting period shall be valued at the planned cost by adjusting it to the effective reporting date

and the feed transferred from the previous reporting period – to the actual cost.

This item shall not include the costs for feed transportation from the permanent

preservation areas to the farm for use. These are attributed to the cost of maintenance of a type

(group) of such animals are reflected in the items “Direct costs of labor remuneration”,

“Mandatory state social and health insurance contributions", "Services", etc.;

e) other material costs - costs related to living material, animal bedding costs, the wear and

tear of small value and short-term assets (special clothing and footwear) in the case where these

can be directly related to the costs of maintenance of orchards, vineyards or some types (groups)

of animals, birds, and other costs, not included in previous items.

2. The item “Direct costs of labor remuneration” reflects the direct costs on basic wages

and additional production workers employed in handloom works, with horses, with tractor per

concrete object of costs evidence in phytotechny, including soil preparation for planting,

processing and harvesting, transportation works; milkmaids, operators of mechanized milking,

cattle keepers, brigadier, calves carers, pigs carers, shepherds, birds carers etc. performing the

technological operations in animal husbandry for care of a respective type (group) of animals or

birds, bee families, as well as artificial insemination of animals. The item includes tariff salary

remuneration, salaries per positions, for work actually performed and awards, including payment

in kind with products for the annual results of activity; supplements to wages and salary per

position for professional skill; additions and supplements for work at night; payment for

overtime; additions and supplements for mixing professions, for work in difficult, harmful and

very harmful conditions, etc.; payments for work performed by temporary workers on a contract

basis; other types of payments.

3. The item “Mandatory state social and health insurance contributions” includes the state

social insurance contributions and premiums required for medical insurance calculated in the

manner prescribed by the law.

4. The item "Services" shall include the cost for services of auto transport, cartage,

transport work performed by tractors, electricity, water and gas supply, refrigeration, provided

for the needs of plant cultivation and livestock production activities, as well as through own

auxiliary activities of the entity, as well as by third parties. This item also includes the costs for

agrochemicals, mechanization, improvement services, introduction of fertilizers, chemical and

biological protection of plants and animals that are provided by third parties. Own services

related to the introduction of fertilizers and plant protection shall be reflected without the cost of

fertilizers and toxic chemicals, which shall be included in the item “Means for protection of

plants and animals” (Item 1 c) of this Annex).

5. The item “Maintenance of fixed assets" shall reflect the costs associated with the

maintenance of fixed assets used directly in production of products in phytotechny and animal

husbandry such as:

- Costs of wages of workers who care for fixed assets (excluding tractor-machinists

employed in the technological processes for the production of agricultural produce);

- Contributions for mandatory state social insurance and mandatory health premiums;

- The amount of lubricants and fuels, and other types of energy used in maintenance of

fixed assets, including agricultural works and other works, the movement of tractors from a

sector to another;

- Fixed asset depreciation amounts reported directly to the crop or type of livestock,

respectively;

- Costs related to the technical maintenance, repairs and running-after repair of tractors,

machinery and other items if these are capitalized in accordance with the general rules set out in

NAS “Intangible and tangible assets”, amount of film used for repairing greenhouses and growth

rooms, costs of replacement and repair of tracks, as well as the share value of tires for tractors,

combines and agricultural machinery.

In phytotechny, the costs related to the maintenance of fixed assets and lease payments

shall be included in the costs of cultivation of some distinct crops (crop groups).

Costs related to the maintenance of fleet, tractors, self-powered combines, aggregates,

other agricultural machines and tools previously reflected in the composition of the costs of

ancillary activities. For all fixed assets (buildings, special buildings, machinery, transmission

systems etc.) used in phytotechny, their maintenance costs shall be accounted for separately,

with the emphasis on their structure, depreciation, repair costs and operating costs during the

reporting period and shall be distributed as provided by the entity's accounting policies at the

reporting date.

In animal husbandry, this item shall account for the depreciation and repair costs of fixed

assets, lease payments and the actual cost of lubricants and fuels for the operation of tractors and

other technical means serving the technological processes of the sector. If these cannot be

included directly in the items of cost evidence of each group (type) of animals, the respective

costs shall be assessed in proportion to the area of the premises occupied by each group of

animals (birds).

6. The item “Indirect production costs” shall reflect the share of indirect production costs

allocated and reported per cost accounting items.

7. The item "Other costs" shall account for the costs of producing products that have not

been reflected in previous items:

- Insurance premiums for crops, vineyards, orchards, animals, premises for cattle and other

fixed assets in phytotechny and animal husbandry;

- Costs related to building-up the farms, building sanitary points of disinfection and

prophylaxis, construction and maintenance of animal summer enclosures - sheds, pens with non-

capital character (the share of current or long-term anticipated expenses with subsequent

reporting at costs in animal husbandry within 3-4 years in equal parts) uniformly established by

the entity;

- Costs related to the adjustment works related to the achievement of the set level of new

production capacity of poultry plants, greenhouse plants, farming complexes, etc. to be put into

operation. The costs shall also previously be accounted for in the composition of the anticipated

expenses and shall be included into the costs related to the phytotechny and animal husbandry,

taking into account the timeframe of the level achieved of actual production capacity of the

entity.

Annex 5

Nomenclature of cost items of ancillary activities

The ancillary costs shall include the following items:

1. Direct costs of materials - the cost of auxiliary materials, fuels and lubricants, spare parts

for repair of fixed assets, construction materials and other materials.

2. Direct costs of labor remuneration - all basic and supplementary wages to employees

shall be calculated based on tariffs, volume of work completed and the position, set for all

employees participating directly in technological processes of production of ancillary activities,

provision of services.

This category of employees shall include the adjusters, locksmiths, lathe operators - in

repair shops; drivers - auto transport; engineers, fitters, locksmiths - fitters - in subdivisions of

electricity, water, steam supply, etc.; horse caregivers for animal traction transport; machinists

providing transport works (except for crop cultivation works) - in cars and tractors park.

3. Contributions for mandatory state social insurance and mandatory health insurance

premiums – contributions for the state social insurance and mandatory health insurance

premiums calculated in the manner prescribed by the law.

4. Services - cost of electricity, water, steam and heat consumption, transport services and

other services used in the ancillary activities.

5. Maintenance of fixed assets – costs related to the maintenance of fixed assets used

directly in ancillary activities:

- costs related to the remuneration of labor force dealing with the maintenance of the fixed

assets;

- contributions for mandatory state social insurance and mandatory healthcare insurance

premiums;

- the amount of lubricants and fuels consumed;

- depreciation of fixed assets of certain types of ancillary activities;

- leasing (rent) of fixed assets under the general rules set out in NAS “Leases”;

- repair costs of fixed assets under the general rules set out in NAS “Intangible and tangible

assets”.

In addition to the costs mentioned, the maintenance costs for auto-transport and other

machinery shall also include the value of their tires and batteries and their repairs.

6. Indirect costs of production - the share of indirect production costs assigned to the

ancillary activities.

7. Other costs – insurance premiums for fixed assets of ancillary activities, the cost of

washing cars for auto transport etc.

Annex 6

Nomenclature of indirect production cost items

in core activities

The indirect production costs of core activities (phytotechny and livestock breeding) shall

include the following items:

1. maintenance costs of management personnel and other personnel - emoluments (basic

and supplementary) in kind and in cash, contributions for mandatory state social insurance and

mandatory healthcare insurance premiums for the management personnel and other personnel

subdivisions:

- In phytotechny - agronomists, brigadiers, reckoners, guards in the fields, etc.;

- In animal husbandry - zootechnicians, veterinarians, farm managers and other personnel

of brigades, farms and other units (reckoners at the fuel points, hydro-technicians, laboratory

technician in veterinary lab points, guards in animal husbandry, etc.).

This item shall also record the costs of maintenance related to the communication means

and other technical means of control, computers used in subdivisions, the wear and tear of small

value and short-term assets, other materials used by senior management and other staff; costs on

business delegation of management personnel and other staff.

2. Costs related to the maintenance of fixed assets - depreciation of fixed assets with

general destination of the sections and sectors (buildings, special buildings, inventory, agro-

cabinets, seeds control laboratories, agrochemical laboratories, veterinary hospitals, pet

pharmacy, veterinary sanitary installations); repair costs according to the general rules set out in

NAS “Intangible and tangible assets”, operation and maintenance of similar fixed assets;

payment for lease (rent) for the objects with general destination of the brigade, farm and sector

under the general rules set out in NAS “Leases”.

3. Costs related to ensuring favorable working conditions, safety at work and security

equipment - installation and maintenance costs related to the enclosures for machinery,

equipment, aggregates, ventilation systems, signage, laundry, showers; value of special clothing

and footwear, goggles and protective gloves and other personal protective equipment provided to

the employees; costs of purchase of posters and tutorials on labor protection; special food costs

provided to the workers; costs of ensuring fire safety subdivisions, etc.

4. Other costs - depreciation and amount of small value and short-term assets; insurance

premiums for general purpose goods in a sector, brigade and firm; round-trip transportation costs

for workers in the workplace; transport of oil products and water for tractors, combine; costs of

carrying out actions with non-capital nature related to combating soil erosion; depreciation of

intangible assets with general destination of the brigadier (farm); costs of planning the

cemeteries for animals and carrying out other quarantine measures; cost of services of ancillary

activities; cash payments for innovations and technical improvement proposals; costs of

maintenance and operation of the means intended for the environment protection, etc.

Annex 7

Nomenclature of indirect production cost items

of ancillary activities

The indirect production costs of ancillary activities by type include the following:

1. Repair workshops:

- Emoluments to the head of workshop, controller-engineer, storekeeper and other

employees performing organization work, supply and management of the workshop, as well as

contributions of mandatory state social insurance and mandatory healthcare insurance premiums;

- The cost of heating, lighting and cleaning of rooms;

- Depreciation of buildings and equipment of the workshops;

- The cost of operation of showers (cost of materials and detergents, energy costs related to

the water supply and heating);

- The cost of the water supply, installing enclosures and ventilation (except those of capital

nature);

- The cost of visual information on safety and security equipment;

- Depreciation of buildings and machinery and repair shops;

- Leasing (lease/rent) of fixed assets serving the production subdivisions;

- Insurance of fixed assets;

2. Auto transport:

- remuneration of the work of the head of garage, dispatcher, accounting, guards and the

mandatory state social insurance contributions and premiums for mandatory state health

insurance;

- The cost of maintenance of garages: repair, lighting, depreciation etc.;

- Other costs that cannot be related to specific items of evidence of costs in auto transport;

3. Fleet of cars and tractors:

- Wages for engineers to operate tractors, combines and other machinery, brigadier, guards,

as well as the mandatory state social insurance contributions and premiums for state mandatory

health insurance;

- Costs of safety equipment and labor protection;

- Depreciation, repair and maintenance of field training camps, etc.

Annex 8

Nomenclature of works on calculation of

costs related to the agricultural produce and additional biological assets

In order to calculate the cost of agricultural produce and additional biological assets, the

entity shall perform the following works:

1) distribution based on the destination of the costs related to the maintenance of fleet of

machinery and tractors;

2) allocation of indirect production costs between the core and ancillary activities;

3) assigning the respective share of current anticipated expenses to the costs of the

reporting period;

4) calculating the actual cost of goods (services) of the ancillary activities and their

distribution per cost accounting objects of the core activities with the subsequent settlement of

deviations between planned and actual costs;

5) distribution per separate items of cost evidence of the core activities and distribution per

cost items on the performance of work: plowing, harrowing, introduction of mineral and organic

fertilizers, etc.;

6) settlement (full or partial) of the costs related to the harvest and crops destroyed due to

exceptional events to the current expenditure costs;

7) determination of the actual cost of products in phytotechny, taking into account the

technological growing peculiarities and destination of the respective crop, availability of primary

(and secondary conjugate) products, production in progress with the calculation of the deviations

between the actual and planned costs and their settlement depending on the intended use of the

products;

8) the allocation of costs associated with the maintenance of departments (kitchen) in

preparation of feed in animal husbandry;

9) establishing the planned costs related to disposal and storage of manure in animal

husbandry;

10) determination of costs that did not generate animal production and/or additional

biological assets due to exceptional events (disease outbreaks, fever and other diseases);

11) adjustment of the total production costs of the reporting period with the amount of

change in the balance of production in progress at the beginning and end of that period on the

respective items of costs evidence in animal husbandry (in case there are production balances in

progress):

- In poultry - the costs of incubation of eggs placed in incubators after the first decade of

December of the current reporting period;

- In beekeeping - with the actual cost of honey left in the hive as food during the winter;

- In fishery - the costs related to summer fish growth;

12) calculation of the actual cost of additional biological assets and livestock products

(methods used depend on the technological peculiarities of growing the animals and use of own

production or purchased feed, availability of conjugated and secondary products);

13) calculation of the actual cost of live weight of livestock;

14) determination and allocation per destination of deviations between the actual and

planned costs of additional biological assets, live weight of livestock and livestock products.

Depending on the profile of the entity’s activity, its structure and applied technologies, not

all preventive work may be needed to calculate the cost of products and additional biological

assets.

Annex 9

Calculation of the cost of wheat seed

Initial data. In June-July 201X, an entity recorded 10,700 q of wheat threshed and

transported on field. After cleaning, drying and sorting, the quality wheat was obtained: super-

elite – 2,000 q, elite – 2,500 q, the first reproduction – 2,700 q, other reproductions – 3,000 q,

feed waste - 260 q with grain content - 40% of unusable waste and natural loss - 240 q. The

average price of 1 q of wheat per quality category constituted: super-elite - MDL 380; elite –

MDL 350, the first reproduction – MDL 300, other reproductions – MDL 280. 8,000 q of straw

were collected and squeaked; the rate of straw collection costs was of 11%. The amount of the

costs of growth, care and harvesting wheat seed including the additional costs of primary

processing, was of MDL 734,000.

The cost of basic and secondary production related to the wheat seed is determined as

follows:

- amount of costs related to the straw - MDL 80,740 (MDL 734,000 × 11%);

- the cost of 1 q of straw - MDL 10.09 (MDL 80,740: 8,000 q);

- amount of costs related to the grain and feed waste - MDL 653,260 (MDL 734,000 -

MDL 80,740);

- quantity of wheat, including from waste feed – 10,304 q [(260 q × 40%) + 2,000 q +

2,500 q +2,700 q + 3,000q];

- the cost of 1 q of wheat depersonalized (without considering the quality) - MDL 63.40

(MDL 653,260: 10,304 q);

- the cost of 1 q of feed waste - MDL 25.36 (MDL 63.40 x 40%);

- the amount of feed waste costs - MDL 6,593.60 (MDL 25.36 × 260 q);

- the amount of wheat seed costs - MDL 646,666.40 (MDL 653,260 - MDL 6,593.60).

Table 3

Cost of wheat seeds by quality category

Quality category Wheat

weight,

q

Price

of 1

q,

MDL

Wheat

value,

MDL

Share of

each

quality

category,

%

Total

costs,

MDL

Cost

for 1

q,

MDL

1 2 3 4 = 2 × 3 5* 6** 7 = 6

: 2

Super-elite 2,000 380 760,000 23.13 149,574 74.79

Elite 2,500 350 875,000 26.64 172,272 68.91

First reproduction 2,700 300 810,000 24.66 159,468 59.06

Other reproductions 3,000 280 840,000 25.57 165,352.40 55.12

Total 10,200 x 3,285,000 x 646,666.40 x

* Share in column 5 – shall be determined as the ratio between the

value of each category of quality products to the total value of these

categories multiplied by 100, for example, the share of super-elite wheat is

23.13% (MDL 760,000: MDL 3,285,000 × 100).

** Amount of costs in column 6 – shall be determined by multiplying

the weight of that quality category and the total costs of these quality

categories. In this way, the total cost of super-elite wheat is of MDL 149,574

(23.13% × MDL 646,666.40: 100).

Annex 10

Calculation of the cost for 1 q of milk and 1 calf

Initial data. In 201X, an entity recorded the costs amounting to MDL 2,904,500 related to

the care of the main herd “Cows for milk”. 13,000 q of milk was obtained and 450 calves. The

costs of evacuation and transport of manure is of MDL 16,200. According to the entity's

accounting policies, the milk related costs represent 90% and those related to the products -

10% of the total amount.

The cost of 1 q of milk and one calf is determined as follows:

- amount of milked milk and products obtained - MDL 2,888,300 (MDL 2,904,500 - MDL

16,200);

- amount of the costs related to:

• milk - MDL 2,599,470 (MDL 2,888,300 × 90%);

• products – MDL 288,830 (MDL 2,888,300 × 10%);

- cost of 1 q of milk - MDL 199.96 (MDL 2,599,470: 13,000 q);

- the cost of one calf - MDL 641.84 (MDL 288,830: 450 calves).

Annex 11

Calculation of 1q cost of the addition to the live weight of young animals

Initial data. In 201X, an entity recorded the costs for rising and care for young horned

cattle animals worth MDL 7,550,000. The movement of animals during the reporting period

includes:

- Live weight at the beginning of the reporting period – 3,000 q;

- Live weight at the end of the reporting period – 3,500 q,

- Animal live weight at disposal – 5,515 q,

- Weight of animals registered at input/entry - 410 q,

- Weight of animals rebutted from the main herd and transferred for fattening – 2,990 q.

There were 12,000 t inputs of manure. The costs of evacuation and transportation of

manure - MDL 18,000.

According to the data in the example, the entity shall prepare the following calculations:

- aggregated addition to the live weight – 2,615 q (3,500 q + 5,515 q – 3,000 q - 410 q –

2,990 q);

- the amount of costs related to the additions to the live weight - MDL 7,532,000 (MDL

7,550,000 – MDL 18,000);

- 1 q cost of the addition to the live weight - MDL 2,880.31 (MDL 753,200: 2,615 q).

__________

Ministry of Finance

Order no.118 of 06.08.2013 on approval of National Accounting Standards //Official Gazette no.

233-237/1534, 22.10.2013s