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Abstract
Farm enterprise analysis is a term
that has traditionally been used to
describe the process of determining
costs associated with farm business
enterprises and enterprise profitability.
A key challenge to those who
would know their costs has been the
lack of guidance on cost accounting
principles and the application of
those principles to agriculture.
However, that recently changed
with the publication of the Farm
Financial Standards Council’s
Management Accounting Principles
for Agricultural Producers, which
has led to questions about the usefulness
of enterprise analysis. The
differences between the two
approaches to determining costs for
farm business enterprises are discussed
as they relate to the usefulness
of the output to managers for
decision making.