DEFERRED FARMING COSTS

9 Months Ended

Sep. 30, 2013

DEFERRED FARMING COSTS

DEFERRED FARMING COSTS

(5)  DEFERRED FARMING COSTS

Orchard costs (e.g. irrigation, fertilizer, pruning, 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’s estimate of the production costs related to macadamia nuts sold during the interim reporting period.  The difference between costs incurred-to-date and costs expensed-to-date is reported on the consolidated balance sheet as deferred farming costs.  Deferred farming costs generally accumulate during the first and second quarters of the year and are expensed over the remainder of the year.