IDEAS home Printed from https://ideas.repec.org/a/caa/jnlage/v63y2017i2id314-2015-agricecon.html
   My bibliography  Save this article

Will the amendments to the IAS 16 and IAS 41 influence the value of biological assets?

Author

Listed:
  • Hana BOHUSOVA

    (Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno, Brno, Czech Republic)

  • Patrik SVOBODA

Abstract

The aim of the paper is the evaluation of the impact of the new amendments to the IAS 16 and IAS 41 - Agriculture: Bearer Plants on the financial reporting in agriculture. The paper is based on the comparison of the current treatments for biological assets in a form of bearer plants measurement using the IFRS13 methodology and the treatments of the amendments to the IAS 16 and IAS 41. Statistical data regarding the selected bearer plant were used for the quantification. The orchard of fruit trees was considered as a suitable representative of bearer plants. As it is clear from the results of the research, the measurement at fair value using the DCF method is based on the estimation which requires a relatively large source of input data for this estimation over the useful life of bearer plants. On the other hand, the effect on the value of the assets could be controversial and the effect on the profit or loss during the useful life could be volatile. Although the objective of the fair value measurement is to achieve a true and fair view, in this case, the fulfilment of this objective is at least controversial, since the biological assets in the form of bearer plants cannot be separately traded.

Suggested Citation

  • Hana BOHUSOVA & Patrik SVOBODA, 2017. "Will the amendments to the IAS 16 and IAS 41 influence the value of biological assets?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(2), pages 53-64.
    • Handle: RePEc:caa:jnlage:v:63:y:2017:i:2:id:314-2015-agricecon
    DOI: 10.17221/314/2015-AGRICECON
    as

    Download full text from publisher

    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/314/2015-AGRICECON.html
    Download Restriction: free of charge
    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/314/2015-AGRICECON.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.17221/314/2015-AGRICECON?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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. Joshua Ronen, 2008. "To Fair Value or Not to Fair Value: A Broader Perspective," Abacus, Accounting Foundation, University of Sydney, vol. 44(2), pages 181-208, June.
    3. 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.
    4. Carlin Dowling & Professor.Jayne Godfrey, 2001. "AASB 1037 Sows the Seeds of Change: A Survey of SGARA Measurement Methods," Australian Accounting Review, CPA Australia, vol. 11(23), pages 45-51, March.
    5. Maria Ionela Damian & Sorana Mihaela Manoiu & Carmen Giorgiana Bonaci & Jiri Strouhal, 2014. "Bearer Plants: Stakeholders’ View on the Appropriate Measurement Model," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(4), pages 719-738, December.
    6. Kathleen F. Herbohn & Ronald Peterson & John L. Herbohn, 1998. "Accounting for Forestry Assets: Current Practice and future Directions," Australian Accounting Review, CPA Australia, vol. 8(15), pages 54-66, May.
    7. Pierre Jinghong Liang & Xiaoyan Wen, 2007. "Accounting Measurement Basis, Market Mispricing, and Firm Investment Efficiency," Journal of Accounting Research, Wiley Blackwell, vol. 45(1), pages 155-197, March.
    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. Patrik Svoboda & Hana Bohušová, 2017. "Amendments to IAS 16 and IAS 41: Are There Any Differences between Plant and Animal from a Financial Reporting Point of View?," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(1), pages 327-337.
    2. Argilés bosch, Josep M.a & Aliberch, Anna Sabata & Blandón, Josep García, 2012. "A Comparative Study of Difficulties in Accounting Preparation and Judgement in Agriculture Using Fair Value and Historical Cost for Biological Assets Valuation," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 15(1), pages 109-142.
    3. Malgorzata Wegrzynska & Alina Nowotarska, 2021. "Measuring and Valuation of Biological Assets: A Research Study," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 331-345.
    4. Josep Ma. Argiles (UB) & Josep Garcia Bladon (IQS) & Teresa Monllau (UPF), 2009. "Fair value versus historic cost Valuation for Biological assets: Implications for the quality of financial information," Working Papers in Economics 215, Universitat de Barcelona. Espai de Recerca en Economia.
    5. Li Yu (Colly) He & Sue Wright & Elaine Evans, 2018. "Is fair value information relevant to investment decision-making: Evidence from the Australian agricultural sector?," Australian Journal of Management, Australian School of Business, vol. 43(4), pages 555-574, November.
    6. Belinda Williams & Trevor Wilmshurst, 2009. "Accounting for SGARAs: Towards Comparability and Consistency," Australian Accounting Review, CPA Australia, vol. 19(2), pages 117-127, June.
    7. Belinda R. Williams & Trevor Wilmshurst, 2009. "The achievability of sustainable reporting practices in agriculture," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 16(3), pages 155-166, May.
    8. Vladu Alina Beattrice, 2013. "FAIR VALUE MEASUREMENT IN AGRICULTURE AND THE POTENTIAL TO MISLEAD Abstract: Applying fair value measurement to tangible and intangible assets in agriculture cannot be risk free. Twofold reasons can b," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 95-98, October.
    9. Kathleen Herbohn, 2006. "Accounting for SGARAs: A Stocktake of Accounting Practice Before Compliance With AASB 141 Agriculture," Australian Accounting Review, CPA Australia, vol. 16(39), pages 62-76, July.
    10. 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.
    11. Liyu He & Sue Wright & Elaine Evans, 2021. "The impact of managerial discretion on fair value information in the Australian agricultural sector," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1897-1930, April.
    12. Rute Gonçalves & Patrícia Lopes, 2015. "Accounting in Agriculture: Measurement practices of listed firms," FEP Working Papers 557, Universidade do Porto, Faculdade de Economia do Porto.
    13. Daniel Buda & Hoinaru Razvan & Mocanu Mihaela & Roman Aureliana-Geta, 2019. "IAS 41 and beyond for a sustainable EU agriculture," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 13(1), pages 829-839, May.
    14. Alex Dontoh & Fayez A. Elayan & Joshua Ronen & Tavy Ronen, 2021. "Unfair “Fair Value” in Illiquid Markets: Information Spillover Effects in Times of Crisis," Management Science, INFORMS, vol. 67(8), pages 5163-5193, August.
    15. He, Liyu, 2020. "Discount rate behaviour in fair value reporting," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).
    16. Matis Dumitru & Bonaci Carmen Giorgiana, 2011. "Recent Developments Of The Financial Reporting Model: Theoretical Studies In Review," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 629-635, July.
    17. Wally Smieliauskas & Russell Craig & Joel Amernic, 2010. "Auditing, Reasoning Systems, Reporting Frameworks, and Accounting Policy Risk: A Response to Alexander," Abacus, Accounting Foundation, University of Sydney, vol. 46(4), pages 455-463, December.
    18. E. Cheynel & M. Liu-Watts, 2020. "A simple structural estimator of disclosure costs," Review of Accounting Studies, Springer, vol. 25(1), pages 201-245, March.
    19. Hélène Rainelli & Hélène Rainelli-Weiss, 2019. "Recherche en finance : quand la performativité invite à la réflexivité," Post-Print halshs-02025011, HAL.
    20. Mohammad Aladwan, 2018. "Accounting Measurement Revolution and Market Value," Modern Applied Science, Canadian Center of Science and Education, vol. 12(11), pages 279-279, November.

    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:caa:jnlage:v:63:y:2017:i:2:id:314-2015-agricecon. 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: Ivo Andrle (email available below). General contact details of provider: https://www.cazv.cz/en/home/ .

    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.