Accounting for Profit or Loss from the Initial Recognition and Measurement of Biological Assets

Olha Melnyk ()
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Olha Melnyk: Vinnytsia National Agrarian University, Vinnytsia, Ukraine

Oblik i finansi, 2018, issue 3, 60-68

Abstract: After the adoption of National Accounting Standard 30 "Biological Assets" in Ukraine, a new procedure for recording profit or loss of agricultural activity was introduced. However, in practice there are difficulties in measurement biological assets and agricultural products at fair value. The issue of accounting for operations with the initial recognition of biological assets and the reflection of changes in fair value at the balance sheet date and after the distribution of overhead costs does not lose relevance. The purpose of the article is to improve the methods of accounting for transactions with biological assets and agricultural products, as well as methods for adjusting financial results from the revaluation of biological assets at the balance sheet date. The differences in the definition of priority assessment in the initial recognition of biological assets and agricultural products in the legislation of Ukraine were considered. The problems of accounting for profit or loss from the initial recognition of biological assets and agricultural products were covered. Author improved the methods of accounting for financial results from initial recognition of biological assets at fair value (minus expenses incurred at the point of sale), as well as a methods of adjusting financial results from revaluation of biological assets and agricultural products at the balance sheet date without adjusting financial results using the red reversal. The methods of recognition and accounting of profit or loss from changes in the fair value of biological assets in the market were substantiated. The methods of displaying on the account 23 "Production" only the historical value of biological assets were proposed.

Keywords: cost accounting; biological assets; fair value; initial recognition of biological assets; methods of accounting for biological assets (search for similar items in EconPapers)
Date: 2018
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