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Accounting treatments and policies for biological assets from the perspective of IAS 41 - Agriculture

Monica Laura Zlati and Valentin Marian Antohi
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Monica Laura Zlati: Dunarea de Jos University of Galati, Romania
Valentin Marian Antohi: Dunarea de Jos University of Galati, Romania

Risk in Contemporary Economy, 2018, 104-113

Abstract: Agriculture is representing one of the main income generating pillars to the state budget and for this reason the specific regulations on treatments and accounting policies represent the goal of many other orders and specific rules and regulations. On the other hand biological assets represent a major interest for economical agents that can use both in terms of stocks in order to obtain immediate incomes and productive biological assets, which have a high reproductive capacity. In the current macro economical context that is heavily hit by an intensified inflation and a destabilizing exchange rate, accounting approaches related to IAS 41-Agriculture require enhanced precaution, especially related to stored production and productive biological assets. The instable landownership domain requires precaution related to protecting future or ongoing investments. We can see a preoccupation of the management of agricultural entities with reducing whole expenses, especially fixed ones, which were somewhat destabilized after the contributions have been transferred from the employer to the employee. Another domain that interests agricultural investors is the significant growth (20%) of the costs with electricity and natural gas. The objectives of the study target the empirical analysis of the accounting, standardization context of the treatment of biological assets and statistical dissemination of information obtained from the study of financial data reported on a national level on two important directions of agricultural activity regulated by CAEN 141 and 130. The research proposes meta-analysis synthesis through the approached directions of treatments and accounting policies for biological assets and concentrating the information obtained through econometric modelling. The model is useful to management of agricultural entities and users of financial information, meaning it shows an improved perspective of the accounting approach on biological assets.

Date: 2018
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