Economic and methodical basis of biological assets measurement under condiitons of accounting transformation towards IFRS
Date
2018-02-26
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Lviv Politechnic Publishing House
Abstract
Under current conditions of economic
management, application of IFRS, especially IFRS 41
“Agricultural sector”, is one of primary elements of
ensuring successful and long-term performance for
domestic agricultural enterprises as well as their mutual
understanding with foreign contracting parties. Current
methods of assessing biological assets and agricultural
goods based on fair value of biological assets require
follow-up revision, making certain adjustments to the
measurement model that, in turn, will guarantee
exchange equivalence between independent parties on
active market.
Fundamental changes being introduced into
current practice of agricultural activity accounting by
Accounting Statement (Standard) 30 include allocation
of plants and animals that belong to agricultural activity
objects into a separate accounting category (“biological
assets”), measurement of biological assets and
agricultural goods based on fair value, special procedure
of determining financial results.
Most often fair value of agricultural goods cannot
be determined with sufficient degree of confidence. The
studies have found that on account of biotransformation,
measurement of biological assets based on fair value will
be much different from measurement based on historic
prime cost. Theoretic and methodological approaches as
well as practical guidelines for biological assets and
agricultural goods measurement based on fair value have
been suggested, which makes it possible to measure the
outcomes of agricultural activity of economic entities
more objectively, extends their opportunities in terms of
attracting investments and improving competitiveness on
agrarian markets.
Description
Keywords
agricultural activity, IAS 41 “Agriculture”, Accounting Statement (Standard) 30 “Biological assets”, biotransformation, agricultural goods
Citation
Shepel T. Economic and methodical basis of biological assets measurement under condiitons of accounting transformation towards IFRS / T. Shepel, J. Narkiewicz // Economics, Entrepreneurship, Management. — Lviv : Lviv Politechnic Publishing House — Vol 5. — No 2. — P. 19–26.