Simplified Reference Margin
Last updated on January 29, 2025
The Simplified Reference Margin makes AgriStability easier to join and to understand. Starting in 2025, you can choose to have your Reference Margin calculated based on cash accounting.
- Cash: revenue is reported when cash is received and expenses are recorded only when cash is paid out
- Accrual: revenue and expenses are reported whenever the transactions occur; this could be before actual money is received or spent
What this means
When submitting your farm's information to AgriStability, you would no longer need to report accrual revenue and expenses. Accruals include purchased inputs, deferred income, accounts receivable and payable, and inventory.
The Simplified Reference Margin is a good option for farmers that are new to AgriStability
You would only need to submit your income and expense information for the past 5 years. We would no longer require your inventory and other accruals from the past 5 years. Submitting less information when signing up can save you time and money. A Simplified Reference Margin can also make the program easier to understand, especially for small farm operations.
This feature only applies to how we calculate your reference margin. Your program year margin will still be calculated on an accrual basis. Learn more about AgriStability Margins.
Important
If you choose a Simplified Reference Margin, you can only switch back to the accrual adjusted method after four program years. However, new participants who choose a Simplified Reference Margin when they join can switch to the accrual adjusted method the following year.
Steps to Receive a Simplified Margin in 2024
You can have your reference margin calculated using the same method of accounting you file to tax (cash or accrual), if you:
- Pay your 2025 enrolment fee
The enrolment fee is due by April 30, 2025, or within 30 days of receiving your enrolment notice, whichever is later.
- Complete the Simplified Reference Margin request form by December 31, 2025
Use the online form to submit a Simplified Reference Margin request.
ONLINE FORM (BCeID required)
Additional Information:
For cash tax filers
- The years included in your Reference Margin will no longer be adjusted to account for cash not yet received or spent by year end. This includes purchased inputs, deferred income, accounts receivable and payable, and inventory.
- You will not have to send AgriStability up to 5 years of historical accrual information when signing up new to the program. This will significantly reduce the amount of information you have to provide.
For accrual tax filers
- Your Reference Margin will continue to be based on the 5 previous years farm information. This includes historical accrual income and expense information. These are the same numbers you report to the Canada Revenue Agency for tax purposes.
- For farmers with livestock, the breeding herd adjustment will no longer apply to your reference years. This was used to adjust the value of breeding animals and culled breeding animals that you report for tax purposes.
Partnerships
Each partner in a partnership can choose to have a Simplified Reference Margin or not.
Combined Farms
All members in a whole farm must have the same method of accounting applied when calculating reference margins (apples to apples comparison). Therefore, all members of a whole farm must choose to have a Simplified Reference Margin.
Structural Changes
- If you file tax on the cash basis, the default structural change method for your Simplified Reference Margin will change from the ratio method to the additive method. The additive method responds better to Simplified Reference Margins and provides a more realistic benefit calculation.
- If you file tax on the accrual basis, the ratio method will remain the default structural change method for your Simplified Reference Margin calculation.
If you've received a 2025 Early Payment (Interim)
If you receive a 2025 interim payment, you can still choose to have a Simplified Reference Margin.
If you receive a 2025 interim payment before sending the consent form, your reference margin used to calculate your interim payment will be different from the reference margin used to calculate your 2025 final payment.
If your interim payment is greater than your final payment, you will have to repay the difference.
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Contact information
Agriculture Insurance and Income Protection Programs help manage production risk and stabilize income.
Regional offices are located around the province.
1-877-343-2767
1-877-605-8467
AgriStability@gov.bc.ca
www.gov.bc.ca/AgriStability