Abstract
Nowadays, the relevance of fair value in financial reporting is gaining impetus and recent discussions are moving in the trend of full fair value reporting. Small and medium-sized entities are not ignored in this instance. The move to new reporting standards results in various challenges for different interest groups such as auditors, preparers and regulators. The main objective of the study was to establish the fair value implementation challenges facing SMEs in the agricultural sector with evidence from regulatory bodies in Ghana. The study established that there is lack of methodological relationship between existing local laws and IFRS and absence of involvement of regulatory bodies in financial reporting standards setting. In light of these challenges, the study recommends involvement of regulatory bodies in standard setting and consideration should also be given to local laws when setting international standards.
Highlights
The agricultural sector is the most important sector in the Ghanaian economy in terms of its share of Gross Domestic Product (GDP), employment and foreign exchange earnings
The study considered the regulatory bodies with respect to financial reporting in Ghana such as the Institute of Chartered Accountants Ghana (ICAG), Ghana Stock Exchange (GSE), Chartered Accountants in audit firms, Stock Exchange Commission (SEC), Ghana Revenue Authority (GRA) and Ghana Audit Service (GAS)
These regulatory bodies were considered because ICAG is responsible for the issuance of national accounting standards which regulate the preparation of financial statements by various entities in the country; and Chartered Accountants in Audit firms offer professional services like audit and assurance, tax and consultancy
Summary
The agricultural sector is the most important sector in the Ghanaian economy in terms of its share of Gross Domestic Product (GDP), employment and foreign exchange earnings This is evident as the agricultural sector employs about 55 per cent of the labour force and contributes about 35 per cent to GDP (Republic of Ghana, 2012). Where the fair value is readily determinable the entity must use the fair value model while, in cases in which the fair value is not readily determinable, the entity must use the cost model for the relevant biological asset
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