Fair Value for Biological Assets: An Empirical Approach

Cavalheiro Rafael Todescato, Kremer Andréia Maria and Gimenes Régio Marcio Toesca
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Cavalheiro Rafael Todescato: MSc Student in Agribusiness, Federal University of Grande Dourados, Dourados, Brazilia
Kremer Andréia Maria: PhD Student in Administration, Federal University of Mato Grosso do Sul, Campo Grande, Brazilia
Gimenes Régio Marcio Toesca: Post-doctorate in Finance, Federal University of Grande Dourados, Dourados, Brazilia

Mediterranean Journal of Social Sciences, 2017, vol. 8, issue 3, 55-68

Abstract: In view of the difficulty in adopting the International Accounting Standard (IAS) 41, which determines the measurement of biological assets, this study aimed at empirically approaching a fair-value based methodology to evaluate biological assets, without an active market. In order to meet the study proposal, a case study with a quantitative approach was carried out to assess a soybean crop cultivated in the Mato Grosso do Sul State. Discounted Cash Flow (DCF) was the chosen evaluation method. Data collection was done through analysis of internal reports and semi-structured interviews. Few practical works detailing valuation of biological assets are available in the national and international literature; therefore, this is the main contribution of this work. Results suggest that besides using economic and accounting knowledge, it is advisable to consider agronomic knowledge since this type of information influences the valuation of biological assets in quantitative and qualitative terms. At the end, general comments and a research agenda are presented.

Keywords: IAS 41; CPC 29; CAPM; WACC (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:mjsosc:v:8:y:2017:i:3:p:55-68:n:37

DOI: 10.5901/mjss.2017.v8n3p55

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