Section 100.12. Financial statement.

 

(1)   General. A milk contractor's financial statement, filed under s. 126.44 , Stats., shall comply with this section and s. 126.44 , Stats.

(2)   Liability disclosures. A financial statement shall include a detailed description of all notes, mortgages and other long-term liabilities not due or payable within one year. The description shall be included in the financial statement notes or as an attachment to the financial statement. The description shall indicate the nature of the liabilities, the due dates, and the payment terms.

(3)   Liability classification . A financial statement shall classify, as current liabilities, notes payable that do not have a specific due date.

(4)   Asset disclosures.

(a) A financial statement shall specifically identify and explain, either in the financial statement notes or as an attachment to the financial statement, the following assets:

1. Every non-trade note or account receivable from an officer, director, employee, partner, or stockholder, or from a member of the family of any of those individuals.

2. Every note or account receivable from a parent organization, a subsidiary, or an affiliate, other than an employee.

3. Every note or account that has been receivable for more than one year, unless the milk contractor has established an offsetting reserve for uncollectible notes and accounts receivable.

(b) A financial statement shall include at least one of the following:

1. An allowance for doubtful or uncollectible receivables. The notes to the financial statement shall describe the method used to account for doubtful or uncollectible receivables.

2. A summary classifying the age of all notes and accounts receivable.

(5)   Debt to equity ratio; liability adjustments.

(a) Solely for the purpose of calculating a milk contractor's fund assessment under s. 126.46 , Stats., a milk contractor may adjust the milk contractor's debt to equity ratio under s. 126.44 (8) (c) 2. , Stats., by deducting, from liabilities reported in the milk contractor's financial statement, an amount borrowed from a lending institution in order to hold aged cheese in inventory for the aging period required for that cheese under 21 CFR 133 . A milk contractor may not make this adjustment unless all the following apply:

1. The milk contractor holds the aged cheese in inventory on the date of the balance sheet.

2. The lending institution holds a security interest in the aged cheese, to secure repayment of the amount borrowed.

3. The amount of the liability deduction does not exceed the amount owed to the lending institution on the date of the balance sheet, or the value of the aged cheese on the date of the balance sheet, whichever is less.

4. The liability deduction and offsetting cheese inventory asset are identified in the financial statement notes or as an attachment to the financial statement.

(b) If aged cheese inventory value as a percentage of total cheese inventory value is greater on the current annual balance sheet date than on the last preceding annual balance sheet date, the liability deduction under par. (a) may not exceed that prior year's percentage multiplied by the total cheese inventory value on the current annual balance sheet date.

(6)   Attachments. If information required under this section is provided in an attachment to a reviewed or audited financial statement, the following requirements apply:

(a) The attachment shall be prepared on the letterhead of the certified public accountant who reviewed or audited the financial statement.

(b) The certified public accountant who reviewed or audited the financial statement shall certify, in the attachment, whether the certified public accountant has reviewed or audited the attachment.

CR 02-113 : cr. Register April 2003 No. 568 , eff. 5-1-03.

Note

"Affiliate" as defined in s. ATCP 100.01 (1) means a person who has significant control or influence. Significant control or influence is a phrase used under generally accepted accounting principals to describe a related party that has sufficient ownership interest to influence the operating and financial policies of an entity. Microsoft Windows NT 6.1.7601 Service Pack 1 The liability adjustment under this section does not apply to the milk contractor's debt to equity ratio when used for any purpose under ch. 126 , Stats., other than the calculation of fund assessments under s. 126.46 , Stats. Microsoft Windows NT 6.1.7601 Service Pack 1