IDEAS home Printed from https://ideas.repec.org/a/ags/agreko/345077.html
   My bibliography  Save this article

The accountancy implications of commodity derivatives: A South African agricultural sector case study

Author

Listed:
  • Middelberg, S.L.
  • Buys, P.W.
  • Styger, P.

Abstract

Agricultural companies and commodity processors trade commodity derivatives on the SAFEX Commodity Derivatives market to hedge themselves and their producers against commodity price risk. Agricultural companies have to adhere to International Financial Reporting Standards (IFRS) of which International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, forms part. The objective of the study was to establish a standard methodology for the interpretation of IAS 39 to serve as a benchmark and best practice for South African agricultural companies and commodity processors. The research found that there is no consistent interpretation or application of IAS 39 by the respondents. The recommended standard methodology to follow includes that agricultural companies holding grain inventory for trading should fair value such inventory and that the classification of transactions as derivative contracts, as defined per IAS 39, depends on whether hedge accounting is applied or not.

Suggested Citation

  • Middelberg, S.L. & Buys, P.W. & Styger, P., 2013. "The accountancy implications of commodity derivatives: A South African agricultural sector case study," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 51(3), February.
    • Handle: RePEc:ags:agreko:345077
    DOI: 10.22004/ag.econ.345077
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/345077/files/The%20accountancy%20implications%20of%20commodity%20derivatives%20%20A%20South%20African%20agricultural%20sector%20case%20study.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.345077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Monk, M.J. & Jordaan, Henry & Grové, B., 2010. "Factors affecting the price volatility of July futures contracts for white maize in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 49(4), December.
    2. repec:eme:marpps:10222529201000009 is not listed on IDEAS
    3. repec:ags:ijag24:347274 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zeeshan Mustafa & Giuliano Vitali & Ray Huffaker & Maurizio Canavari, 2024. "A systematic review on price volatility in agriculture," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 268-294, February.

    More about this item

    Keywords

    Financial Economics;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:agreko:345077. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aeasaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.