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Biological assets reporting: Is the increase in value caused by the biological transformation revenue?

Author

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  • Hana BOHUŠOVÁ

    (Department of Accounting and taxes, faculty of business and Economics, Mendel University in Brno, Brno, Czech Republic)

  • Patrik SVOBODA

    (Department of Accounting and taxes, faculty of business and Economics, Mendel University in Brno, Brno, Czech Republic)

  • Danuše NERUDOVÁ

    (Department of Accounting and taxes, faculty of business and Economics, Mendel University in Brno, Brno, Czech Republic)

Abstract

Agricultural activity differs from other activities carried out by business units to achieve the profit. Agricultural activity is in comparison with other activities of business subjects dependent on the natural and environmental conditions, and therefore the agriculture specialization is narrowly connected with geographical position. The aim of the paper is to identify the possible obstacles in the practical application of the International Accounting Standard 41 (IAS 41) and to suggest the possible ways of their elimination. The comparative analysis of the currently applied rules for agricultural activity reporting and the analysis of the current accounting treatment of agricultural activity under the International Financial Reporting Standards (IFRS) were the starting point of the research. This part serves as the basis for own research in which the authors are trying to identify the specifics of agricultural production, biological assets and biological transformation. More suitable methods for their recognition, measurement and reporting were suggested as an alternative to the current treatments. At the end, the results are also confronted with contemporary scientific literature on that topic, which is not very broad. The main reason for the research of the authors in this area is the possible elimination of obstacles in the practical application of the IAS 41.

Suggested Citation

  • Hana BOHUŠOVÁ & Patrik SVOBODA & Danuše NERUDOVÁ, 2012. "Biological assets reporting: Is the increase in value caused by the biological transformation revenue?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(11), pages 520-532.
    • Handle: RePEc:caa:jnlage:v:58:y:2012:i:11:id:187-2011-agricecon
    DOI: 10.17221/187/2011-AGRICECON
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    References listed on IDEAS

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    1. Charles Elad, 2004. "Fair value accounting in the agricultural sector: some implications for international accounting harmonization," European Accounting Review, Taylor & Francis Journals, vol. 13(4), pages 621-641.
    2. Brian Booth & R. G. Walker, 2003. "Valuation of SGARAs IN THE Wine Industry: Time for Sober Reflection," Australian Accounting Review, CPA Australia, vol. 13(31), pages 52-60, November.
    3. Christopher Nobes, 2006. "The survival of international differences under IFRS: towards a research agenda," Accounting and Business Research, Taylor & Francis Journals, vol. 36(3), pages 233-245.
    4. Viorel Lefter & Aureliana Geta Roman, 2007. "IAS 41 Agriculture: Fair Value Accounting," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 5(5(510)), pages 15-22, May.
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    Cited by:

    1. Bocart, Fabian Y.R.P. & Hafner, Christian M., 2015. "Fair Revaluation of Wine as an Investment," Journal of Wine Economics, Cambridge University Press, vol. 10(2), pages 190-203, November.
    2. Saverio BOZZOLAN & Enrico LAGHI & Marco MATTEI, 2016. "Amendments to the IAS 41 and IAS 16 - implications for accounting of bearer plants," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(4), pages 160-166.

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