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Article

Economic and methodical basis of biological assets measurement under conditons of accounting transformation towards IFRS

Tetiana Shepel Jolanta Narkiewicz
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 Ukrainian 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

Keywords

agricultural activity, IAS 41 “Agriculture”, Accounting Statement (Standard) 30 “Biological assets”, biotransformation, agricultural goods

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Received 05.02.2018, Revised 14.03.2018, Accepted 25.09.2018

Retrieved from Vol. 5, No. 2, 2018

Suggested citation

Shepel, T., & Narkiewicz, J. (2018). Economic and methodical basis of biological assets measurement under conditons of accounting transformation towards IFRS. Economics, Entrepreneurship, Management, 5(2), 19-26. https://doi.org/10.23939/eem2018.02.019

https://doi.org/10.23939/eem2018.02.019

Pages 19-26

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