As most of you know, the pooling of interests method simply combined the accounts of each merging company at book value, with no adjustments to reflect market value differences. In addition, retained savings of both companies were also combined.

Congratulations are in order for Brian Bohling upon his induction into the Nebraska Football Hall of Fame this past fall. The Nebraska Football Hall of Fame is sponsored by the Nebraska Chapter of the National Football Foundation and College Football Hall of Fame.

While this year brought success for some, most of you missed an opportunity to utilize non-qualified patronage allocations. I use the term “missed” because making a non-qualified allocation with a cooperative that hasn’t utilized or discussed such allocation in advance, is difficult to do at the audit board meeting.

Recently, an issue has been raised with the IRS concerning the deductibility of grain payables recorded in a cooperative’s financial statements, and therefore in its tax return, for deferred payment contracts. The question was posed as to why the cooperative taxpayer should be allowed to deduct in its tax return a payable for grain purchased under a deferred payment arrangement, allowing the farmer/seller the opportunity to defer the reporting of his income to a subsequent tax year.

What an extraordinary year! This year’s audits were some of the most interesting we have seen in a long time. Many of you enjoyed extremely successful years by capitalizing on all of the positives in the short list above. While others not so fortunate were negatively affected by some of the events, a few managed to successfully straddle their ups and downs and come out even.

The fortunes of any company have, historically, been closely tied to how well they managed risk. Written policies, approved by the board of directors and adhered to in practice, are of critical importance to ensure that the company operates within prescribed risk tolerances. In today’s fiercely competitive and challenging environment, an up-to-date policy manual, appropriate to a company’s functions and business plan, may be more important than ever. There are numerous benefits to having a relevant and effective policy manual, and severe consequences to having one that is stale and out of date.