Crop Method

AAA

DEFINITION of 'Crop Method'

This method of accounting is available for farmers who do not harvest and sell their crops in the same year that they planted and grew them. The crop method allows the farmer to deduct the full cost of crop production in the year that the crop is actually sold. This effectively allows the farmer to write off the production cost against the revenue received in the same year.

INVESTOPEDIA EXPLAINS 'Crop Method'

The cost of production in this case includes the cost of purchasing seed or baby plants. The crop method is one of several special methods of accounting available for farmers. However, the farmer must petition the IRS for approval before using this method of accounting.

RELATED TERMS
  1. Crop Year

    The time period from one year's harvest to the next for an agricultural ...
  2. Direct Method

    A method of creating a statement of cash flows during a given ...
  3. Indirect Method

    A method for creating a statement of cash flows a company may ...
  4. Expanded Accounting Equation

    The expanded accounting equation is derived from the accounting ...
  5. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  6. Billing Cycle

    The interval of time during which bills are prepared for goods ...
Related Articles
  1. Economic Indicators That Do-It-Yourself ...
    Investing Basics

    Economic Indicators That Do-It-Yourself ...

  2. Harvesting Crop Production Reports
    Options & Futures

    Harvesting Crop Production Reports

  3. What impact does a higher non-farm payroll ...
    Forex

    What impact does a higher non-farm payroll ...

  4. No Longer Nomads: The History Of Real ...
    Home & Auto

    No Longer Nomads: The History Of Real ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center