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Update on Pork Financial Standards Training Sessions

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Class 3 (one day) Inventory adjustments overview. Chart of accounts setup ... Crew Labor. Equipment. Facilities Management. Feed Processing. General Pork. Isolation ... – PowerPoint PPT presentation

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Title: Update on Pork Financial Standards Training Sessions


1
Update on Pork Financial Standards Training
Sessions
  • FFSC 2000 Technical Symposium
  • Donald W. Gillings, CPA, CAC
  • AgriSolutions Inc.

2
Training Programs
  • Introduction Training
  • Vet clinics
  • One day program
  • Lender training
  • Certification
  • Non-certification
  • Two day program

3
Training Programs
  • Producer Training
  • Seven class sessions
  • Spread over 13 months
  • Ten days total
  • Instructor Training
  • Swine Extension Adult Ag Educators
  • Interested qualified service providers
  • Certification with annual updates required

4
Training Activity
  • Two lender training sessions
  • Eleven producer training series in process
  • MN
  • IA
  • IL
  • OH
  • IN
  • MO
  • Additional series as requested

5
Training Program Content
  • Production measures (57)
  • Financial measures (43)
  • Combination (Integrated) measures (57)
  • Database as one strategy to gain value from
    employing the standards

6
Producer Class Overview
  • Class 1 (two day)
  • Production measures and definitions
  • Production reports
  • ROE Model overview
  • Class 2 (two day)
  • Managerial accounting
  • Concepts
  • Application
  • Managerial reporting

7
Producer Class Overview
  • Class 3 (one day)
  • Inventory adjustments overview
  • Chart of accounts setup
  • National Swine Database introduction
  • Class 4 (one day)
  • Using the standards
  • Loading production data
  • Benchmarking

8
Producer Class Overview
  • Class 5 (two day)
  • Inventory valuation accounting issues
  • Activity level managerial accounting
  • Class 6 (one day)
  • Benchmarking
  • ROE Model with actual information

9
Producer Class Overview
  • Class 7 (one day)
  • Management Decisions
  • Using production standards knowledge
  • Using financial standards knowledge

10
Financial Standards Training Focus
  • Managerial accounting
  • A formal system of accumulating and reporting
    financial data useful for the achievement of
    management objectives.
  • National Hog Farmer, March 1, 1999 (Production
    Financial Standards for the Pork Industry) page 95

11
Managerial Accounting is about . .
  • Accumulating information on manageable segments
    of the business
  • Improve the producers ability to manage those
    parts of the business by focusing on
  • Personnel / Area performance measurement
  • Revenue / Profitability measurement
  • Asset management / utilization
  • Cost control

12
Managerial Accounting is about . .
  • Manageable segments are
  • Profit centers
  • Cost centers

Responsibility Centers
13
Managerial Accounting is about . .
  • Profit center cost center structure typically
    organized by
  • Commodity
  • Location
  • Activity
  • Group/Field/Pen

14
Managerial Accounting is about . .
  • Specified types of profit centers
  • Commodity approach
  • Pig sales
  • Activity approach
  • Weaned pig sales
  • Nursery pig sales
  • Finished pig sales
  • Genetic Premium

15
Managerial Accounting is about . .
  • Specified types of cost centers
  • Production stages
  • Support operations
  • General and administrative
  • Financing

16
Managerial Accounting is about . .
  • Production stage cost centers (activity approach)
  • Breeding
  • Nursery
  • Finish

17
Managerial Accounting is about . .
  • Support operations cost centers (commodity /
    location activity approach)
  • Boar Stud
  • Crew Labor
  • Equipment
  • Facilities Management
  • Feed Processing
  • General Pork
  • Isolation
  • Nutrient Management
  • Production Management
  • Transportation
  • Vet Services

18
Managerial Accounting is about . .
  • General administrative cost centers (commodity
    / location activity approach)
  • General Administrative
  • Or
  • Administration
  • Human Resources
  • Internal Accounting
  • Legal
  • Management Information Systems

19
Managerial Accounting is about . .
  • Financing cost centers (commodity / location
    activity approach)
  • Financing
  • Or
  • Interest
  • Owner Withdrawals (Excess)
  • Gain (Loss) on Sale of Assets
  • Income Taxes

20
Managerial Accounting is about . .
  • Management intent
  • Major determining factor of whether a segment is
    a
  • Profit center
  • Cost center
  • Managements objective / rationale
  • Managements behavior

21
Managerial Accounting is about . .
  • Allocation guidance
  • Allocation criteria
  • Allocation sequence

22
Managerial Accounting is about . .
  • Allocation sequence (continued)
  • Support operations cost centers allocate to
  • Other support operations cost centers
  • Production stage cost centers
  • Profit centers
  • Production stage cost centers allocate to
  • Other production stage cost centers
  • Profit centers
  • GA and Financing cost centers do not allocate to
  • Other non-production cost centers
  • Profit centers.

23
Managerial Accounting is about . .
  • Allocation comments
  • Ultimately all cost centers are allocated to the
    profit centers
  • Maintain a separation of product costs from
    period expenses
  • G A and Financing do not go to production
    focused cost centers

24
Managerial Accounting is about . .
  • Reporting specified
  • Format
  • Content
  • Profit measurement points three
  • Breakeven measurement points three
  • Production units three
  • Allocation detail
  • Quantities

25
Reporting
Per unit of production
Revenue
Direct production expenses
Indirect production expenses
Production profit
GA expenses
Operating profit
Financing expenses
Net income
Production cost breakeven
Operating cost breakeven
Total cost breakeven
26
Managerial Accounting is about . .
  • Reporting specified
  • Doesnt prohibit other reporting as desired
  • Separation of production and non-production
    expenses
  • Separation of production, GA and financing costs

27
Financial Standards Training Focus
  • Managerial accounting training objectives
  • Conceptual understanding
  • Apply the concepts to the specification of a
    managerial accounting structure for the
    participants operation(s)
  • Workshop approach
  • Gets the participant to the point of
    implementation

28
Impediments to Implementation
  • Tools to facilitate the employment of managerial
    accounting (how)
  • Accounting knowledge (how)
  • Defined implementation process (how)
  • Human resource to handle ongoing activities while
    pursuing this much change (how)
  • Full appreciation for the value of the knowledge
    that results (why)
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