Note 8 - Deferred Farming Costs

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Deferred Costs Capitalized And Inventory Disclosure [Text Block]

(8) DEFERRED FARMING COSTS

Orchard costs (e.g., irrigation, fertilizer and pruning) related to nuts sold under nut purchase contracts and services provided under farming contracts were expensed to cost of revenues based on management’s estimate of the costs expected to be incurred to produce macadamia nuts sold during the interim reporting period, with the difference between costs incurred-to-date and costs expensed-to-date reported on the consolidated balance sheet as deferred farming costs. Deferred farming costs historically accumulate during the first and second quarter of the year and are expensed over the remainder of the year.

With the expiration of the final non-IASCO nut purchase contract in December 2014 and the Partnership’s retention of the harvested macadamia nuts in inventory, a significant portion of incurred farming costs are now captured in the inventory asset, and expensed to cost of revenues when the inventory is sold.