Farm Income

AAA

DEFINITION of 'Farm Income'

Farm income refers to profits and losses incurred through the operation of a farm. A farm income statement (sometimes called a farm profit and loss statement) is a summary of income and expenses that occurred during a specified accounting period. This period is usually the calendar year for farmers (January 1 - December 31).

INVESTOPEDIA EXPLAINS 'Farm Income'

In U.S. agricultural policy, farm income can be divided as follows:


Gross Cash Income: the sum of all receipts from the sale of crops, livestock and farm related goods and services, as well as any direct payments from the government.


Gross Farm Income: the same as gross cash income with the addition of non-money income, such as the value of home consumption of self-produced food.


Net Cash Income: the gross cash income less all cash expenses, such as for feed, seed, fertilizer, property taxes, interest on debt, wagers, contract labor and rent to non-operator landlords.


Net Farm Income: the gross farm income less cash expenses and non-cash expenses, such as capital consumption and farm household expenses.


Net Cash Income: a short-term measure of cash flow.

RELATED TERMS
  1. Crop Method

    This method of accounting is available for farmers who do not ...
  2. Adjusted Gross Income - AGI

    A measure of income used to determine how much of your income ...
  3. Profit and Loss Statement - P&L

    A financial statement that summarizes the revenues, costs and ...
  4. Investment Farm

    An agricultural business operation that is purchased and operated ...
  5. Crop Year

    The time period from one year's harvest to the next for an agricultural ...
  6. Taxable Income

    The amount of income that is used to calculate an individual's ...
Related Articles
  1. Forex Education

    Trading The Non-Farm Payroll Report

    Discover how to trade the NFP report without getting knocked out by the irrational volatility it can create.
  2. Taxes

    What is the best method of calculating depreciation for tax reporting purposes?

    Learn the best method for calculating depreciation for tax reporting purposes according to generally accepted accounting principles, or GAAP.
  3. Fundamental Analysis

    Are accounts receivable used when calculating a company's debt collateral?

    Learn how accounts receivables are recorded as assets on a balance sheet; they are used when calculating a company's total debt collateral.
  4. Markets

    What Cuba-US Relations Could Mean For U.S. Industry

    The restoration of diplomatic relations with Cuba could mean big profits for U.S. travel, agriculture, and financial services sectors.
  5. Fundamental Analysis

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  6. Fundamental Analysis

    Paid-Up Capital

    Paid-Up Capital is listed in the equity section of the balance sheet. It represents the amount of money shareholders have paid into the company by purchasing shares. It’s essentially two accounts, ...
  7. Fundamental Analysis

    What is the difference between cost of equity and cost of capital?

    Read about some of the differences between a company's cost of equity and its cost of capital, two measures of its required returns on raised capital.
  8. Fundamental Analysis

    Is depreciation only used for tangible assets?

    Learn if tangible assets can be depreciated, as well as what other assets are eligible for depreciation so you can account for them accurately.
  9. Fundamental Analysis

    What does a high weighted average cost of capital (WACC) signify?

    Find out what it means for a company to have a relatively high weighted average cost of capital, or WACC, and why this is important to lenders and investors.
  10. Fundamental Analysis

    How do intangible assets appear on a balance sheet?

    Understand how various types of intangible assets are handled in a company's accounting and which of them you can find on a company's balance sheet.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center