Mod3_2 - UNIT 3.2 FARM RESOURCE ASSESSMENT ! Understand the...

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PPT 3.2 1 UNIT 3.2 FARM RESOURCE ASSESSMENT Objectives Instructional Contents ! Understand the concepts of farm assets and liabilities. ! Prepare lists of farm assets and liabilities sorted according to group and type (assets, liabilities, fixed and current assets, short- and long-term liabilities). ! Understand the concept of Net Worth and techniques for its calculation ! Understand the concepts and uses of balance sheet and profit and loss statements. ! List a range of sources of finance for farmers, underlying the advantages and disadvantages. Session 3.2.1 Farm Assets Session 3.2.2 Farm Liabilities Session 3.2.3 Asset Valuation Session 3.2.4 Inventory of Farm Resources Session 3.2.5 Balance sheet Session 3.2.6 Net Worth Session 3.2.7 Profit and Loss Statements Session 3.2.8 Sources of Finance Exercises No. 10, 11, 12, 13 and 14 Handouts Handout G
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PPT 3.2 2 Farm Assets Assets are items of value owned by the farm. In other words, farm assets are what the farmer owns. Farm assets can be divided into two categories: fixed and current assets . Fixed Assets are long-term assets. Selling fixed assets has a direct effect on farm operations. These include farm property, farm related credit, and contracts that farmers have with suppliers or market outlets. Livestock and tree crops are also regarded as fixed assets in agriculture. Current Assets refer to assets that can be used up during an accounting period (financial year) or can be converted to cash without having any negative effect on farm operations. Current assets are cash in hand and money on deposit, livestock for sale, grain and feeds in store.
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PPT 3.2 3 List of typical assets of a farm: Land, Buildings and Machinery are basic resources and are considered as fixed assets Livestock and poultry are assets that are either used to produce saleable produce (e.g. milk and eggs) or are sold directly as breeding stock. Growing crops refer to the costs incurred for crop enterprises which are in the process of being produced (e.g. crops that have not been harvested and are still lying in the field. Harvested crops are products that have been harvested and are currently stored at the farm.
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PPT 3.2 4 Input stocks are the value of inputs used for the production of saleable produce including raw materials (e.g. fertilizer, sprays), fuel, spare parts, bags and other materials. Debt is money owed to the farmer for the sale of produce and services. Cash ismoney at hand Money on deposit is money that is kept in a bank or other financial institution.
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Mod3_2 - UNIT 3.2 FARM RESOURCE ASSESSMENT ! Understand the...

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