Sale of Harvested Produce
Recording the final sale of stored grain, wool, or milk.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Bank | Asset (+) | 6,000.00 | - |
| Sales Revenue (Produce) | Revenue (+) | - | 6,000.00 |
| Cost of Goods Sold | Expense (+) | 5,000.00 | - |
| Inventory (Harvested Produce) | Asset (-) | - | 5,000.00 |
💡 Accountant's Note
Once harvested, the sale follows standard retail/wholesale accounting rules.
Practitioner & Systems Framework
💻 ERP Architecture
From harvest onward, the produce follows IAS 2 / IFRS 15 rules. Revenue is recognized when control of the produce passes to the buyer — at the weighbridge, delivery point, or warehouse receipt, depending on the sales terms. The COGS is the inventory carrying value (which was set at the IAS 41 fair value at harvest) — so the gross margin on produce sales will reflect only the price change between harvest date and sale date. For produce sold under grade contracts (e.g., grain sold at a premium for feed-grade wheat), the actual grade premium or discount received may differ from the grade assumed at harvest, creating a small true-up between expected and realized revenue. Configure the ERP to match inventory lots to sales on a specific identification or FIFO basis so COGS reflects the correct lot's carrying value.
⚠️ Audit Flags
(1) Revenue cut-off — is the sale recognized in the period when control passes, not when the invoice is raised or cash is received? For grain delivered FOB at the silo, revenue recognition is on the delivery date. (2) Grade adjustments — if the produce is sold at a different grade than assumed at harvest, is the revenue correctly recorded at the actual contracted price? (3) Broker / agent sales — for produce sold on commission, does the farmer recognize gross revenue (full sale price) or net revenue (after commission)? The farmer is the principal and should recognize gross, with commission as a selling cost.
📄 Required Documentation
Sale contract or purchase order, weighbridge docket or delivery confirmation, grade analysis report, sale invoice, cash receipt or bank statement, inventory derecognition records, and agent remittance statement (if sold through broker).
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.