BACHELOR'S DEGREE PROGRAMME

(MA/ACA) 2020/2021
LEVEL THREE

SPECIFIC ACCOUNTING
CHAPTER 4: ACCOUNTING IN AGRICULTURAL
ENTERPRISES
Agricultural enterprises are composed of animal husbandry, fish farming and agricultural
activities itself.
An agricultural enterprise is an enterprise with an autonomous financing and decision taking
which combines the factors of production so as to produce in great quantities, goods and services
destined for sales. The analysis of the investment cycle, exploitation cycle and financing cycle
possess certain specific problems hence necessitating an accounting for agricultural firms.
I- CONCEPTUAL FRAMEWORK FOR ACCOUNTINF FOR AGRICULTURAL
ENTERPRISES:
These enterprises apply the OHADA accounting system. However, the application to the
activities of agriculture of the OHADA accounting system implies a certain number of
adaptations following the general principle of the OHADA system. These adaptations are related
to the specificity of the activities of agricultural enterprises.
1- Principles and accounting conventions:
The principles, conventions and rules of the OHADA accounting system are applicable in
agricultural enterprises without any exemptions. (Prudence, permanence of the method,
intangibility of the opening balance sheet, autonomy of accounting periods, historical cost,
continuity of exploitation, transparency)
2- Accounting plan of agricultural enterprise:
The general list of the account numbers of the OHADA accounting plan is adapted to the need of
the agricultural enterprise. The main accounts of the OHADA accounting system are equally
used in agricultural exploitation. However small difference exists between notably:
 Sub accounts 2245 amelioration of funds can be created
 At the level of stock accounts agricultural enterprise instead use:
31- Stock of goods and supplies
32- Animals (goods)
33- Plants or vegetables kingdom (goods)
34- Production in process, animals
35- Production in process plants
36- Intermediary product
362- Animals
363- Plants
37- Finished product
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 372- Animals
373- Plants
378- Appendix activities
38- Stock on consignment or at the deposit
39- Depreciation of stock
 At the level of the revenue accounts, sub account ‘714’’ exploitation indemnities and
844 off exploitation indemnities and subventions are created.
3- The method of evaluation:
Animals which are alive are evaluated following the general disposition of the OHADA
accounting system the acquisition cost for goods bought, production cost for goods produced or
market value for goods acquired as gift or exchange. During the period of growth, the increase of
the value is equally remarketed to the tune of the corresponding production cost, either through
variation of stock 603 and 73 animals alive stocked or production stocked, account 722-
Animals alive stocked.
According to their nature and circumstances depreciation and provision are equally practiced.
The production cost is determined using the cost and management accounting or simply using
statistical procedures. Sometimes animals which are alive can still be evaluated at the market
price after deducting the margin of the enterprise at the end of closing the period.

II- Accounting analysis of some specific transactions of agricultural firms

These operations are related to the investment cycle and exploitation cycle.
1- Operations of investment cycle: This refers to the acquisition, the production, the
disposal, the throwing away and the accidental destruction of certain goods (assets which
services durably in the enterprise such as fruits plantations, animal reproduction and so
on.

1.1- Service productive Animals:

These are animals which are destined to stay for a long time in the firm so as to render services
to the enterprise. They are therefore considered as fixed assets which are recorded in the
following accounts:\
2461- Life stock, farming animals
2463- Life stock, guidance animals
2468- Sundry animals (others)
These accounts record the value of animals at the stage of their biological production. When
these animals are in the course of training, their respective values are carried to the various
accounts.
24961- Life stock, farming animals in progress
24963- Life stock, guidance animals in progress
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24968- Sundry animals (others) and agricultural fixed assets in progress.
An example of services production animals can be farming horses, competitive horses (running),
specific time or leisure horses etc.
1.2- Reproductive animals:
These are animals which produce product for sales example; milk from female cows, layers (old
layers), eggs etc. productive animals which are destined to stay durably in the enterprise so as to
produce goods for a long time are recorded as fixed assets if the normal production duration is
sufficiently long.
Reproductive animals with lifespan of more than a year are recorded in the following accounts
2462- Life stock, reproductive animals (when these adult animals are already producing)
24962- Life stock, reproductive animals in progress (when the young animals are still being
reared)
1.3- Fruits plantations:
Fruits trees are generally destined to stay for a long time in the enterprise so as to produce fruits.
There are therefore considered as fixed assets. Therefore fruit tree plantations are recorded in
account 2465-Agricultural plantation when the trees are already at maturity and producing the
fruits.
Non fruit trees plantations are recorded in account 2241- Tree and bush plantation. The entry
into the patrimony of services productive animals, reproductive animals and fruits tree plantation
are recorded as follows:
246/2469 Animal assets xxxx
4451 VAT xxxx
5……. Treasury account xxxx
4812 Suppliers of fixed assets xxxx
722 Tangible fixed assets (living animals) xxxx

The exits of living animals from the patrimony of the enterprise are recorded as the exit of
depreciable and non-depreciable assets in commercial and industrial enterprises. In the case of
disposal, account 246 credited with the game of account 81 disposal accounting value and
account 82 disposal revenue values or if this disposal is habitual accounts 654 and 754 would be
used. Exit through accidental destruction or throwing away can lead to the calculation of
exceptional depreciation.
Operations of exploitation cycle

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The living goods (chicks), consumption chickens, calf, piglet, rabbits and non living goods (eggs,
milk, fruits, vegetables, etc.) produced by the agricultural enterprise constitute stocks.
The purchase of raw materials and consumable materials used for the up-bringing of the living
and the non-living goods are recorded to the debit of the following accounts
- 602 Purchase of raw materials and related stores.
- 604- Purchases of stored consumable materials
- 605- Other purchases
The entry into stock of the living and non-living products are recorded as follows:
Debit: 32/33/34/35/36/37 and credit 73.
The sales of the living and non-living products are recorded as follows:
411 customers xxxx
57/52/53/513 Means of payment xxxx
702 Services sold xxxx
701 Sales xxxx
4431 VAT on sales xxxx

The exit from stock of the living and non-living product is recorded as follows:
Debit: 73/603 and credit 31/32/33/37
2.3- Auto-consumption (self-consumption)
These are living and non-living products taken by the proprietor for family consumption without
any payments. Considering the importance of this gesture account 1047 will be debited when the
self-consumption is exercised by the proprietor or by family members, or account 6617 or 6627
when this gesture is exercised by a worker in the agricultural enterprise to the credit of account
721.
2.4- Amelioration of funds:
Express engaged to ameliorate the exploitation lands for goods fertility need a fixed asset amount
account to be debited because it is considered as investment. These works would increase the
efficiency of the lands (drainage, irrigation, leveling etc.) account 224- Development works on
land would be used for this purpose.
2.5- Participation in professional agricultural organization:
The frequency and the importance of participating in such organization needs the creation of
account 256- Participation securities in professional organizations

III- END OF PERIOD ACTIVITIES AND FINANCIAL STATEMENTS:

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These activities run from extra-accounting inventory, calculation and recording of depreciation,
provisions for depreciation, financial provisions for risk and charges after having regularized the
account of expenses and revenues and the balance sheet account. The presentation of financial
statements using either the normal or simplified system. The financial statements are presented
as follows.
1. Balance Sheet of an Agricultural enterprise (normal presentation)
ASSETS COST ACC PROV NBV
Intangible fixed assets
Intangible fixed assets on living goods Xxxx Xxxx Xxxx
Land Xxxx Xxxx Xxxx
Improvement and amelioration of land Xxxx Xxxx Xxxx
Buildings Xxxx Xxxx Xxxx
Machinery equipments and design Xxxx Xxxx Xxxx
Materials Xxxx Xxxx Xxxx
Tangible fixed assets on living goods Xxxx Xxxx Xxxx
Perennial plantations Xxxx Xxxx Xxxx
Others Xxxx Xxxx Xxxx
Advances on accounts on fixed assets Xxxx Xxxx Xxxx
Financial fixed assets Xxxx Xxxx Xxxx
TOTAL FIXED ASSETS Xxxxx Xxxxx Xxxxx
Current assets
Stock of living animals and in progress
Animals Xxxx Xxxx Xxxx
Cultural advances Xxxx Xxxx Xxxx
Vegetables kingdom Xxxx Xxxx Xxxx
Stock of finished product
Animal Xxxx Xxxx Xxxx
Vegetables kingdom Xxxx Xxxx Xxxx
Stock of supplies of various goods Xxxx Xxxx Xxxx
Debt and assimilated debts Xxxx Xxxx Xxxx
Supplier and supplier advances Xxxx Xxxx Xxxx
Customers Xxxx Xxxx Xxxx
Other debts Xxxx Xxxx Xxxx
TOTAL CURRENT ASSETS Xxxx Xxxx Xxxx
Treasury assets Xxxx Xxxx Xxxx
Land titles Xxxx Xxxx Xxxx
Net worth to be received Xxxx Xxxx Xxxx
Bank, Giro account and cash Xxxx Xxxx Xxxx
TOTAL TREASURY ASSETS Xxxx Xxxx Xxxx
TOTAL ASSETS xxxxx xxxxx xxxxx
NB: LIABILITIES (WITHOUT CHANGES)
2- Profit and loss account:
At the level of the profit and loss account some small modifications are observed at the level of
account for expenses and accounts for revenues.

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Account for expenses (normal system) all general disposition are maintained except account.
APPLICATION
Record in the journal the following transaction realized by an agricultural enterprise.
01/02- Purchase of a piece of land of 10 hecters at 25 000 000FCFA. The commission paid to the
agent represent 10% of this value. The registration right 750 000FCFA. Other expenses to obtain
the land tittle 250 000FCFA. The price of the land is settled by cheque and that of expenses by
cash
04/02- Conclusion of a contract with a public work enterprise for the construction of a drainage
and an irrigation system. The cost of the works is estimated at 60 000 000. To start up the works,
an advance of 15 million through postal cheque transfer is paid.
05/04- Purchase of young palm trees from IRA destine for the creation of a palm groove.
Amount 24 500 000 on credit
09/04- Purchase of fertilizers and and pesticides for the palm groove. Amount 8000 000 tax
exclusive, VAT 19.25% by cheque
11/04- The enterprise constructed a poultry of 5000m² for the rearing of chickens. The cost of
this construction determined by its cost accounting service is presented as follows:

Elements Amount
Direct man power 1 800 000
Materials used 6 200 000
Depreciation 1 400 000
Other external services 2 600 000
Total production cost before tax 12 000 000
VAT 19.25% 2 310 000
Total production cost tax inclusive 14 310 000

12/04- Purchase of 5000chicks of a day old. 2000 will be reared to bring up chickens for the
market while 3000 will be transform to old layers and to be conserved in the enterprise for at
least 2years. Unit price of a chick is 150frs.
15/04- Purchases of chicks feed 6000 000 tax exclusive VAT 19.25%
20/04- Purchases of vitamins and vaccines for the chickens 30 000
30/04- Sales of 800 chickens at 1800 each. VAT 19.25%
30/04- Purchase of a German Sheppard to guard the poultry. Amount 260000F tax exclusive
01/05- Sales of eggs an amount of 150 000F tax exclusive VAT

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 02/05- Sales of old layers which have made more than two years in the enterprise, 4 800 000F
tax exclusive. Balance sheet value 5 400 000F, provision for depreciation for these chickens 1
000 000F
05/05- 20 chickens (final cost per chicken 1800) taken by the proprietor for auto consumption.

SOLUTION:
2211 Land for agricultural use 2 500 000
6323 Commissions to forwarding agent 2 500 000
646 Registration right 750 000
6325 Expenses on land tittles 250 000
521 Bank 2 500 000
571 Cash in hand 3 500 000
Being acquisition of land

2221 Lands to be developed 60 000 000

531 Giro bank 15 000 000
4013 Suppliers sub-contractors 45 000 000
Being……………………

2496 Biological assets 24 500 000

4812 Supplier of tangible fixed assets 24 500 000
Being credit purchase of young palm tree

605 Other purchases 8 000 000

4452 VAT recoverable 1 540 000
521 Bank 9 540 000
Being purchase of pesticides

2478 Other fitting and fixtures on equipment. 12 000 000

445 VAT recoverable 2 310 000
722 Tangible fixed asset 12 000 000
4434 VAT invoiced on self construction 2 310 000
Being construction of self used

24692 Life stock in progress 450 000

604 Biological assets 300 000
4812 Suppliers of fixed asset 450 000
401 Suppliers 300 000
Being purchases of life stock

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605 Other purchases 6 000 000
4453 VAT recoverable 1 155 000
401 Suppliers 7 155 000
Being purchase of raw materials

605 Other purchases 80 000

401 Suppliers 80 000
Being purchase of materials

411 Customer 1 717 200

702 Services sold 1 440 000
4431 VAT invoiced 277 200
Being services sold

2463 Securities animals 260 000

445 VAT recoverable 50 000
481 Suppliers of fixed assets 310 000
Being purchases of securities animals

411 Customers 1 788 700

702 Services sold 1 500 000
4431 VAT invoiced 288 750
Being services sold on credit

654/81 Disposal at book value 5 400 000

24 Equipment 5 400 000
Being disposal of fixed asset

Drawings for personal use

1047 Self constructed product 36 000
721 Being consumption by the proprietor 36 000

Provision of fixed assets

29 Provision written back 1 000 000
79 1 000 000

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