Measurement Issues in Assessing Farm Profitability through Cash Tax Returns
| dc.creator | Barnard, Freddie L. | |
| dc.creator | Ellinger, Paul N. | |
| dc.creator | Wilson, Christine A. | |
| dc.date | 2017-04-01T19:47:14Z | |
| dc.date.accessioned | 2026-07-09T05:24:23Z | |
| dc.description | It is widely accepted that net farm income reported on an accrual-adjusted income statement is a more appropriate profitability measure than net farm income reported on Schedule F of the federal tax return, which is prepared using cash basis accounting. However, a common practice among agricultural lenders is to use Schedule F net farm income, which uses the cash basis of accounting, as a proxy for accrual-adjusted net farm income. A study of 1,045 individual Illinois farms’ records from 2002 through 2006 found the median absolute annual percentage difference between a three-year average cash and a three-year average accrual-adjusted net farm incomes is 57 percent for farms of stable size; 43 percent for farms with annual gross revenue increasing at rates of less than 5 percent, 50 percent at rates of 5-10 percent, and 58 percent at rates over 10 percent; and 61 percent for farms with a debt-to-asset ratio greater than 40 percent. | |
| dc.identifier | doi:10.22004/ag.econ.96408 | |
| dc.identifier | https://ageconsearch.umn.edu/record/96408/files/334_Barnard.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/96408 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/563206 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/96408 | |
| dc.title | Measurement Issues in Assessing Farm Profitability through Cash Tax Returns | |
| dc.type | Text |