Accounting for Biological Assets PDF
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i Accounting for Biological Assets This book explores accounting for biological assets under International Accounting Standard (IAS) 41 Agriculture, and explains the recent adjustments introduced by the International Accounting Standards Board (IASB) which allow firms to choose between cost or revaluation models concerning mature bearer plants. Identifying the firm and country-l evel drivers that inform the disclos- ure and measurement practices of biological assets, this concise guide examines the value relevance of measuring those assets at fair value. It also analyses how firm and country-l evel drivers explain the differences in the disclosure level and practices used to measure biological assets under IAS 41. Finally, it evaluates whether there is a difference in the relevance of biological assets among the listed firms with high and low disclosure levels on biological assets. Based on a major international study of a wide selection of firms and country- level drivers, this book is vital for standard setters, stakehold- ers, students, accountants and auditors who need to understand disclos- ure and measurement practices of biological assets under IAS 41. Rute Gonçalves is Accounting Supervisor at Centrar, S.A. RAR Group, Portugal. She has previously taught at the University of Porto, Portugal. Patrícia Teixeira Lopes is Associate Dean at Porto Business School, University of Porto, Portugal. She was a research member of INTACCT, a European project on the application of the IAS/I FRS in Member States of the European Union. ii Routledge Focus on Business and Management The fields of business and management have grown exponentially as areas of research and education. This growth presents challenges for readers trying to keep up with the latest important insights. Routledge Focus on Business and Management presents small books on big topics and how they intersect with the world of business. Individually, each title in the series provides coverage of a key aca- demic topic, whilst collectively, the series forms a comprehensive collec- tion across the business disciplines. ISSN: 2475– 6369 For a complete list of titles in this series, please visit www.routledge.com/ business/ series/ FBM Auditing Teams: Dynamics and Efficiency Mara Cameran, Angelo Ditillo and Angela Pettinicchio The Reflective Entrepreneur Dimo Dimov The Spartan W@rker Konstantinos Perrotis and Cary L. Cooper Writing a Business Plan: A Practical Guide Ignatius Ekanem Manager vs. Leader: Untying the Gordian Knot Robert M. Murphy and Kathleen M. Murphy Accounting for Biological Assets Rute Gonçalves and Patrícia Teixeira Lopes iii Accounting for Biological Assets Rute Gonçalves and Patrícia Teixeira Lopes iv First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 Rute Gonçalves and Patrícia Teixeira Lopes The right of Rute Gonçalves and Patrícia Teixeira Lopes to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing- in- Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-i n- Publication Data A catalog record for this book has been requested ISBN: 978- 0- 815-3 7141- 0 (hbk) ISBN: 978- 1- 351- 24682- 8 (ebk) Typeset in Times New Roman by Out of House Publishing v Contents List of tables vi List of appendices vii List of annexes viii List of abbreviations ix 1 Overview 1 2 International Accounting Standard 41 Agriculture 3 3 Accounting for biological assets: Current debate 12 4 Fair value relevance of biological assets 33 5 Empirical evidence 42 6 Main findings and future avenues of research 67 References 69 Appendices 79 Annexes 102 Index 105 vi List of tables 2.1 Examples of biological assets, agricultural produce and products that are the result of processing after harvest 5 2.2 Historical development of IAS 41 10 3.1 Measurement – firm- level drivers 22 4.1 Fair value relevance – literature review 37 5.1 Ten firms with higher and lower disclosure levels by country and sector 47 5.2 Ranking of the more representative countries by the number of firms and their average disclosure level 48 5.3 Disclosure drivers’ behaviour 49 5.4 Number of firms by country with the related measurement practice 53 5.5 Measurement drivers’ behaviour 55 5.6 Selection distribution 58 5.7 Ranking of the more representative countries by the number of firms and their average disclosure level 62 5.8 Value relevance drivers’ behaviour 63 vii List of appendices Appendix A Disclosure index 79 Appendix B Proxies, description and expected signals 83 Appendix C Descriptive statistics 85 Appendix D Ranking of countries by the number of firms and their average disclosure level 87 Appendix E Pearson’s correlation 89 Appendix F OLS regression model 90 Appendix G Chi- squared test between biological assets and measurement practice 91 Appendix H Number of firms by country with the related measurement practice 92 Appendix I Logit regression model 93 Appendix J Expectation- prediction evaluation for binary specification 94 Appendix K Goodness- of- fit evaluation for binary specification 94 Appendix L Robustness test – sectors: agriculture versus manufacturing 95 Appendix M Robustness test – sectors: agriculture versus manufacturing (details) 96 Appendix N Panel fixed effects regression model 98 Appendix O Bearer and consumable biological assets classification 99 Appendix P Robustness test – market value six months after fiscal year- end 100 Appendix Q Robustness test – firms above first quartile of biological assets per share selection’s distribution 101 viii List of annexes Annex A Leuz’s (2010) cluster classification 102 Annex B Brown et al. (2014) classification 103 neiwgexnprepdf List of abbreviations AASB Australian Accounting Standards Board CFO Chief Financial Officer CPC Comitê de Pronunciamentos Contábeis FASB Financial Accounting Standards Board GAAP Generally Accepted Accounting Principles IAS International Accounting Standard IASB International Accounting Standards Board IASC International Accounting Standards Committee IFRS International Financial Reporting Standards OLS Ordinary Least Squares PwC PricewaterhouseCoopers R&D Research and Development SBF Société des Bourses Françaises
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