more standardized financial reporting from his farm customers. "As an agricultural bank president, I saw firsthand the lack of complete and uniform reporting by so many of the producers," said Mr. Godwin, who heads $41 million-asset First State Bank of Canadian. "There was so much variation in the type of reporting and so many ratios of financial success." That's why he became involved in a group that recently released the latest version of financial reporting guidelines for farmers spelling out what to report and how to calculate it. Some farmers and lenders already use some of the guidelines, but the Farm Financial Standards Council wants more to adopt them. "Basically, it is going to allow us to look at the financial statements of all of our customers from a common perspective," said Michael Weasel, vice president, agricultural services, in the Springfield, Ohio, office of $20 billion-asset Huntington National Bank. "Most other industries have had those kind of standards in place and agriculture hasn't," said Mr. Weasel, who has been involved in the effort. The quest for standardized definitions and calculations for farm performance was born during the farm crisis of the 1980s. Farm failures in that decade revealed that reporting standards were woefully insufficient and wildly inconsistent from customer to customer. Efforts to improve the standards led to a vast array of different methods and programs, and comparisons remained difficult. In 1988, the American Bankers Association's agricultural bankers division initiated a task force to investigate standardizing financial reporting. In March 1993 the group became an independent nonprofit organization. Last November it became the Farm Financial Standards Council, based in Naperville, Ill., a Chicago suburb. Its first guidelines were released in 1991 and revised in 1994 and again this summer. Though they continue to be developed, many bankers have begun to use at least some of them. The recommendations cover three main areas: uniformity in financial reporting, definitions for performance measures, and alternatives for establishing a national agricultural financial data base. The 100-plus-page document details recommendations on statements of income, owner equity, and cash flows, including calculations for various performance ratios. And it gets into the financial nitty-gritty, such as reporting and valuing inventories, livestock, and capital leases. Mr. Godwin noted that the effort is "one of the few times" agricultural lenders agree on something, uniting commercial bankers, as well as lenders from the Farm Credit System, Farmers Home Administration, insurance agencies, and equipment manufacturers - as well as producers and agriculture educators. Copies of the revised guidelines can be obtained from Performance Management Resources Inc. in Denver.
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