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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;(5)&amp;#160; DEFERRED FARMING COSTS&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;Orchard costs (e.g. irrigation, fertilizer, pruning,&amp;#160;etc.) related to nuts sold under nut purchase contracts and services provided under farming contracts are expensed to cost of goods sold and cost of services provided based on management&amp;#8217;s estimate of the production costs related to macadamia nuts sold during the interim reporting period.&amp;#160; The difference between costs incurred-to-date and costs expensed-to-date is reported on the consolidated balance sheet as deferred farming costs.&amp;#160; Deferred farming costs generally accumulate during the first and second quarters of the year and are expensed over the remainder of the year.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
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