Fair Value Of Biological Assets Research Articles

IAS 41 and biological assets in Brazil

Brazil is one of the emerging countries that has adopted the IFRS, and agribusiness plays a relevant role in the Brazilian economy, turning the country into an important player in the review and discussion process of international standards. The objective of this paper is to assess whether IAS 41 contributes to the enhancement of the quality of accounting information, given that the measure that was previously used was historical cost, with no changes in the future economic benefits being disclosured, resulting in low-quality information. To analyse agribusiness companies’ financial statements, five analysis sections were created: disclosure in the notes; value relevance; timeliness of fair value information on biological assets; earnings management; and experts’ opinion of the quality of the information on the biological assets. The results reveal that: there have been improvements in the compulsory disclosure required by IAS 41, but this disclosure is not yet suitable; variations in the fair value of biological assets are value-relevant, but not for bearer plants; the information on biological assets is not timely; there are signs of earnings management by companies with lower disclosure levels; analysts consider that non-financial information may be prepared more useful. No study was found in the literature that considered the combination of the level of disclosure of the notes to the financial statements, the value relevance, the timeliness of the fair value information, earnings management and analysts’ opinions.

IAS 41 and biological assets in Brazil

Brazil is one of the emerging countries that has adopted the IFRS, and agribusiness plays a relevant role in the Brazilian economy, turning the country into an important player in the review and discussion process of international standards. The objective of this paper is to assess whether IAS 41 contributes to the enhancement of the quality of accounting information, given that the measure that was previously used was historical cost, with no changes in the future economic benefits being disclosured, resulting in low-quality information. To analyse agribusiness companies’ financial statements, five analysis sections were created: disclosure in the notes; value relevance; timeliness of fair value information on biological assets; earnings management; and experts’ opinion of the quality of the information on the biological assets. The results reveal that: there have been improvements in the compulsory disclosure required by IAS 41, but this disclosure is not yet suitable; variations in the fair value of biological assets are value-relevant, but not for bearer plants; the information on biological assets is not timely; there are signs of earnings management by companies with lower disclosure levels; analysts consider that non-financial information may be prepared more useful. No study was found in the literature that considered the combination of the level of disclosure of the notes to the financial statements, the value relevance, the timeliness of the fair value information, earnings management and analysts’ opinions.

Examining The Value Relevance of Biological Assets and Their Fair Value Change in Malaysia

The Malaysian Financial Reporting Standard 141 (MFRS 141) on agriculture requires all agriculture companies to measure their biological assets based on fair value less cost to sell. Some researchers argue that fair values of biological assets are not reliable and relevant whereas the others suggest that they are value relevant. The purpose of this study is to investigate the value relevance of biological assets and the change in the fair value of biological assets in Malaysia, as measured in accordance with the MFRS 141. Specifically, this investigation looked into whether or not biological assets and changes in fair value over time are relevant to market value. In particular, the study concentrated on assessing whether biological assets and changes in their fair values have a substantial influence on the market value. The sample for this study is made of agriculturally-related companies that had their shares listed on a public stock exchange in Malaysia between 2018 and 2020. The research project was carried out in Malaysia. The investigation was conducted in a manner that adhered to the value relevance technique that Ohlson (1995) recommended. It was revealed that the biological asset and the change in fair value that was established by using MFRS 141 are both major factors that play a role in the process of determining market value. The results lead the researchers to the conclusion that the adoption of MFRS 141 - Agricultural resulted in an improvement in the quality of financial reporting of biological assets in Malaysia. Future studies should include sample from ASEAN, Asia or developed countries so that the results can be generalised.

ANALYSIS OF THE APPLICATION OF PSAK 69 ON BIOLOGICAL ASSETS AT PT AUSTINDO NUSANTARA JAYA Tbk.

This research aims to analyze the theory and practice of preparing financial statements carried out, especially on the recognition, measurement, and disclosure of biological assets. This research is a case study of PT Austindo Nusantara Jaya Tbk. (ANJ). The method used in this study is a qualitative research method where the data source in this study is secondary data, namely the financial statements and annual reports of PT Austindo Nusantara Jaya Tbk. (ANJ). The data analysis technique used in this study is a descriptive method of comparative qualitative approach. According to the Financial Report of PT Austindo Nusantara Jaya Tbk. (ANJ) in 2020, it shows that biological assets lie in current assets. This means that the asset has a useful life or undergoes a biological transformation in less than a year. Meanwhile, biological assets are measured by fair value minus costs for sale. The estimated fair value of biological assets will increase (decrease) if: (1) The estimated price of tbs and edamame beans is higher (lower), (2) The estimated yield is higher (lower), and (3) The estimated cost of maintenance, harvest, and transportation is lower (higher). PT Austindo Jaya Nusantara Tbk. has recognized all its biological assets with reference to the realization of production. Thus, the asset is recognized in the harvested crop.

Audit features for the fair value of biological assets in modern conditions

Audit features for the fair value of biological assets in modern conditions

FEATURES OF CLASSIFICATION OF PROFITS OF AGRICULTURAL ENTERPRISE

In the article the description of agricultural enterprise and features of agriculture are given. It is consist in by main and specific capital goods. The profits of agricultural enterprise as economic category are considered, which represent the optimal return of enterprises generating in sizes, necessary for coverage of him current outlays. General essence of profits of agricultural activity, confession of profit is analysed and his reliable estimation. Principles, which foresee the choice of method of estimation and reflection in the financial reporting of all profits of enterprise, and also feature of forming of financial result in agricultural enterprises in connection with the specific of industrial and economic activity of industry, are educed. Classification of profits of agricultural enterprises is considered from primitive confession of biological assets and agricultural produce, profit from the change of fair value of biological assets, profit from realization of biological assets and agricultural produce, got as a result of biological transformations, after book-keeping approach in obedience to the requirements of legislation, by administrative approach which enables to collect and group information for an acceptance and realization of corresponding decisions. Certainly existent substantial features of profits on agricultural enterprises, which are predefined by the accepted legislative base, at which biological assets and regulated order of their confession, estimation and account are certain and accordingly which the constituents of financial results of agricultural enterprises belong. Substantial influence is marked on a size and forming of financial results of agricultural enterprises of classification of profits. It is recommended on the basis of the conducted research of classification of profits of agricultural enterprises at a record-keeping. Drawn conclusion, that logical and structured classification of profits of agricultural enterprises is the extraordinarily important aspect of their activity and provides for, will enable effectively by them to manage and be the constituent of modern control system.

Earnings quality before and after the implementation of PSAK 69

PSAK 69 Agriculture regulates the accounting treatment of agricultural activities in Indonesia. The measurement of biological assets is the most important part of the arrangement of PSAK 69. PSAK 69 deals with biological assets measured at fair value less costs to sell at the beginning and end of the reporting period. Characteristics of growing biological assets will have an impact on the growth in fair value of assets, so there will be differences in fair value at the beginning and end of the financial reporting period. The difference in fair value of biological assets, whether realized or not, is recognized as gain in the current period. This will have an impact on the quality of the company's earnings. This study aims to examine differences in earnings quality before and after the implementation of PSAK 69 in agricultural sector companies listed on the Indonesia Stock Exchange. The research was conducted on 14 agricultural companies listed on the Indonesia Stock Exchange in the 2016-2019 observation period. Earnings quality is measured by the earnings response coefficient. Earnings response coefficients are estimated using the firm specific coefficient model (FSCM) and pooled cross-sectional regression model (CSRM) methods. This study measures the quality of earnings before and after the application of PSAK 69. The quality of earnings before and after the application of PSAK 69 is tested by a paired two-sample t-test. The results of this study found no difference in earnings quality before and after the application of PSAK 69.

Organization of primary, analytical and synthetic accounting of biological assets and agricultural products

The article substantiates the provisions of appraisal, primary, analytical and synthetic accounting of biological assets and agricultural products at fair value less costs of sale. The methodology is recommended for determining the fair value less costs of selling biological assets and the commercial and non-commercial agricultural products collected (received) from biological assets. Forms of primary documents, accounting registers and, accordingly, recommendations for the organization of primary, analytical, synthetic accounting and analysis of biological assets assessed at fair value less costs of sale and results from their biotransformation (agricultural products, income, expenses and financial results) have been developed. A method is proposed for determining the aggregate financial results (aggregate income, aggregate expenses and aggregate profit) from the biotransformation of biological assets. The methodology for assessing changes in the fair value of biological assets as of the end of the next reporting period is recommended.

Management aspects of accounting for biological assets and agricultural products

Agricultural activity is a strategic direction of the work of agricultural organizations, ensuring food independence and security of the country. In this regard, in modern conditions there is an objective need to improve the management of biotransformation of biological assets and its accounting and control functions. The work defines the objects of management and accounting of agricultural activity: biological assets; agricultural products; income, expenses and financial results from biotransformation of biological assets; government grant related to a biological asset measured at fair value less costs to sell. Recommendations are proposed on the determination and analysis of changes in the fair value of biological assets less costs to sell due to changes in unit prices and the amount of these assets. In addition, methodological aspects of monitoring the effectiveness of the use of biological assets and the production of agricultural products collected from them are identified. Each of these indicators provides indicative indicators, methods of calculation and comparison with similar indicators of the base period or planning. The following are methods for determining individual indicators from the proposed system that allow organization managers at all levels of internal management to make scientifically sound economic decisions to improve the efficiency of the processes of biological transformation of biological assets and agricultural production in agricultural organizations.

Methodical approaches to the assessment of the reproduction of the agricultural enterprises material and technical base

The signifcance of the evaluation of the logistical base of agricultural enterprises in the accounting system is revealed in the article. Research methods have been described and alternative approaches to inventory valuation by national and international accounting standards have been investigated, and it has been identifed that there are some inconsistencies in the formation of inventory values at the date of receipt, disposal and balance sheet date. The main features of organization of accounting of land plots in agricultural enterprises are established. To determine the value of the land previously used by the enterprise (for example, on certifcates of ownership and use), we propose to use in the current accounting the estimated value of the land, which is based on the regulatory monetary valuation, determined by differential rental income. It has been found that an integral part of a biological transformation is the assessment of changes in a biological asset, which includes measuring and controlling changes in quality (fat content, protein, fber strength, etc.) or quantity (breeding, weight, etc.). In the course of the research it is determined that the process of accounting and valuation of biological assets at fair value should include such steps as: defning biological assets as an object of accounting according to their classifcation; specifcation of biological assets by species, cultures, rocks and other defning features; active market research and price information and technical and economic information collection; selection of biological asset valuation methodology; the calculation of the fair value of biological assets in accordance with the methodology adopted. An examination of the IFRS 13 "Fair Value Measurement for the measurement of biological assets at fair value" has shown that it should be made from the perspective of all market participants and the market environment should be assigned to the entities themselves. This will take into account the differences that exist between them, as they differ not only in terms of quality but also in the types of economic activity. In order to improve the investment attractiveness of enterprises, it is advisable to evaluate agricultural organizations' land resources according to International Accounting Standards, which provide for fair value. Valuation of assets and liabilities at this cost will increase the transparency of the fnancial statements and the reliability of the information on the fnancial and economic activities of the entity. In addition, in the analysis of fnancial and economic activity of enterprises of the corporate sector of the agrarian economy, a real assessment of land resources will have a positive impact on the normative indicators of liquidity and fnancial stability, which is especially important in the conditions of fnancial crisis and growing need for investment. Key words: material base, resources, inventories, fxed assets, reproduction process, market value, fair price, land valuation, accounting efciency.

Fair Value of Biological Assets: An Interdisciplinary Methodological Proposal

Abstract Given the complexity of measuring the fair value of agricultural biological assets, which generally do not have an active market and are dependent on climatic, environmental and biological factors, there is a need for an interdisciplinary view that considers inputs other than economic and accounting. In this sense, the present theoretical essay aims to propose an interdisciplinary methodology to measure the fair value of agricultural biological assets considering also the agronomic factors. As a method, a bibliographic research of an exploratory-descriptive nature was adopted. To support the interdisciplinary methodological proposal, a theoretical framework was developed using the disciplinary lenses of accounting, economics and agronomy, with a focus on agrometeorological modeling. In addition to the methodological proposition, an application was made in the sugarcane sector to demonstrate the behavior and range of the variables. The main contribution of this study is the proposition of an innovative measurement methodology, which considers the agronomic aspects in accounting measurement, which can result in an improvement in the quality of the information, mainly as regards reliability. JEL Code: O32, Q16, C18.

COMPOSITION AND ASSESSMENT OF BIOLOGICAL ASSETS ACCORDING TO NATIONAL ACCOUNTING STANDARDS (PUBLIC SECTOR ACCOUNTING STANDARDS) 136 “BIOLOGICAL ASSETS”

COMPOSITION AND ASSESSMENT OF BIOLOGICAL ASSETS ACCORDING TO NATIONAL ACCOUNTING STANDARDS (PUBLIC SECTOR ACCOUNTING STANDARDS) 136 “BIOLOGICAL ASSETS”

Accounting Treatment of Biological Assets in Plantation Industry on Wetlands (Case Study in Plantation Company Entities in South Kalimantan)

<p><em>The purpose of this study is to determine the Accounting treatment of biological assets based on IAS 41 Agriculture. DSAK-IAI in the process of convergence of PSAK with IFRS states that one of the standards that is still being project remaining work since 2010 is IAS 41. IAS 41 is adopted into PSAK No.69 Agriculture as the Accounting standard that regulates special biological assets that will be effectively applicable on 1 January 2018. The results of this study are expected to provide the description of Accounting treatment based on IAS 41 in more detailed and clear in terms of recognition and presentation and disclosure of biological assets. However, in terms of measurement, IAS 41 will be more difficult to implement because the market price for the plantation industry has not been able to be a benchmark of fair value.</em></p><p><em> This research was a qualitative descriptive research by giving a description of the Accounting treatment of biological assets engaged in oil palm plantation. Data collection techniques used questionnaires sent to the company with 10 (ten) samples of oil palm companies representing Banjarmasin City, Banjarbaru City, Banjar Regency, Tapin Regency and Tanah Laut regency. The data were analyzed by using descriptive analysis and index calculation of implementation conformity to the standard. </em></p><p><em> The results showed that the companies have applied the Accounting treatment of biological assets on the average of 90.8% based on research indicators. In terms of classification the companies have classified 100% of its biological assets well. Recognition, measurement and assessment of biological assets, the companies applied research indicators in the range of 84% - 97%, this condition was caused more because the basis of valuation with the fair value of biological assets was not readily available in the active market thus affecting the recognition, measurement and valuation of those assets. While Presentation and Disclosure of Biological Assets in the financial statements, the companies applied 77.5% - 96% of the existing disclosure indicators.</em></p><p> </p><p> </p><p> </p>

Is fair value information relevant to investment decision-making: Evidence from the Australian agricultural sector?

Despite major accounting standards boards worldwide continuing to use fair value extensively, academic evidence on the relevance of fair value accounting has focused on financial assets. This study breaks new ground to provide the first empirical evidence for the agricultural sector on the relevance of fair value accounting. It examines the forecasting power of the fair value of biological assets for future operating cash flows. Using all agribusinesses listed in Australia, where fair value accounting was first implemented in the agricultural sector, we find that fair value of biological assets does not provide incremental forecasting power for future operating cash flows, whether market-determined prices or managerially estimated value is used. The findings of this study provide empirical support for the call by Elad and Herbohn in 2011 for the International Accounting Standards Board (IASB) to revisit the implementation of fair value accounting in the agricultural sector. JEL Classification: G14, G38, M41, Q18

CHARACTERISTICS OF THE ACCOUNTING OF BIOLOGICAL ASSETS IN THE GRAIN PRODUCTION

Today globalization of the world market leads to the need for the constructive interaction within the international market and the formation of common accounting forms and standards. The multinational corporations represent organizations that have divisions in different countries of the world. Therefore preparation of clear and transparent financial reports for such companies requires the establishment of common international standards. International financial reporting standards (IAS or IFRS) have become such standards. They are designed to provide an understanding of the reporting forms, to give an objective assessment of the property, as well as to promote interaction between investors and potential investment objects located in different national accounting systems. One of the standards that is of great importance for the Russian Federation is IAS 41 "Agriculture". Agriculture is one of the leading sectors in our country, which supplies products to both domestic and foreign markets. Accordingly, the adoption of the Russian analogue of this standard and the implementation of its provisions is a significant and important issue of today's economic reality.Thus, the need to allocate biological assets in a separate accounting and economic category, their reflection in accounting and reporting at fair value in accordance with the provisions of IAS 41 determined the relevance of the topic, purpose, objectives and logic of this work. The article suggests the author's approach to the calculation of the fair value of biological assets.

Matching Measurement to Asset Use: Evidence from IAS 41

I investigate whether asset use influences the decision-usefulness of fair value measurement. Specifically, I examine whether fair value is more decision-useful for in-exchange assets relative to in-use assets. I test the hypothesis on a sample of international firms that adopt International Accounting Standard 41 and my findings suggest that asset use does influence the usefulness of fair value measurement. Specifically, in cross-sectional tests I find that the fair value of biological assets and the associated unrealized gains and losses are more decision-useful when the assets derive value in-exchange, relative to when the assets derive value in-use. In an additional analysis where I use the firm as its own control, I find that the decision-usefulness of in-use firms’ book value and income declines following the adoption of IAS 41, confirming the cross-sectional findings. At present, the Conceptual Framework provides little guidance on asset measurement, resulting in inconsistencies across measurement standards. Thus, my findings may provide insight to standard setters and those interested in conceptually-based asset measurement.

Алгоритм оценки биологических активов по справедливой стоимости

The article deals with the issues, related to the fair value of the biological assets. Biological assets are specific assets of agricultural organizations. They are living organisms, whose distinctive feature is the ability to biotransformation. All of these changes require careful consideration and reflection on the accounts. The question of transition to the fair value of biological assets remains actual, hence the need for significant adjustments of modern accounting is appeared. The developed principles and rules for assessing the biological assets at fair value involve the development of the algorithm for calculating the fair value of biological assets and the results of their biotransformation. The authors proposed an algorithm to calculate the fair value of biological assets and the results of their biotransformation, which involves the following steps: identification the biological assets as the object of accounting in accordance with their classification , specification of biological assets by type, by crop , by species and other distinctive features; to study an active market and collect the information on prices, to collect technical and economic information; the choice a methodology for assessing the biological assets; the calculation the deductible expenses, the fair value of biological assets in accordance with the adopted methodology. This method of determining the fair value will receive the most reliable estimate of the biological assets of which will continue to shape reliable information on the activities of the organization.

DO THE CERTIFIED ACCOUNTANTS KNOW THE MENSURATION OF BIOLOGICAL ASSETS AT FAIR VALUE? AN ANALYSIS OF THE CENTRAL REGION OF PORTUGAL

Normal 0 21 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Tabela normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Accounting regulation has evolved considerably concerning agricultural activity. Fair value relevance, as a basis for accounting measurement, instead of historical cost, led to the emergence of more specific standards in this sector, measuring the fair value of biological assets and agricultural products. The European Union has adopted the International Accounting Standards (Regulation 1606/2002 of 19 July 2002), providing the necessary ground for a new accounting standards system in Portugal (Sistema de Normalização Contabilística - SNC). This new paradigm hosts, particularly, fair value measurement, without historical cost suppression. In this paper will be analysed to what level the Certified Accountants in Portugal (Centre Region) are familiar with SNC specially NCFR 17, and if it provides a more accurate and proper view, comparatively to historical cost. We will also analyze the (in)adequacy of historical cost in agricultural activity and some specific aspects of NCRF 17. At last, it will be analysed market/fair value, compared to historical cost, presents greater or lower operationalization/implementation complexity. From the study performed, done through descriptive analysis of an inquiry, it is concluded that the Certified Accountants (Centre Region) SNC's knowledge and training is satisfactory but is insufficient to what NCRF 17 is concerned.