What are Intermediate-Life Plants?

Intermediate-life plants are plants that have a growth and production cycle exceeding one year, but less than those of trees and vines. Examples are artichokes, asparagus, and grazing grasses. During their development, a farmer may engage in land preparation, plant purchases, and cultural care. Development costs should be accumulated until production begins in commercial quantities. At that point, you should depreciate the costs over the estimated useful life of the plantings. The useful life chosen for depreciation may vary, depending on regional differences and other factors.

The cost of intermediate-life plants is reported on the balance sheet as a non-current asset. Since this cost is classified as non-current, it is positioned lower down on the balance sheet, after all current assets but before current liabilities.

A farm should disclose in the footnotes attached to the financial statements the accumulated costs for intermediate-life plants, as well as their estimated useful lives.