scholarly journals Fair Value as a Measurement Basis: The Case of Agriculture in Portugal

2021 ◽  
Vol 6 (3) ◽  
pp. 137-145
Author(s):  
Maria da Conceicao da Costa Marques
Keyword(s):  
Fair Value ◽  
Agricultural Activity ◽  
Relevant Market ◽  
Advantages And Disadvantages ◽  
Current Location ◽  
Measurement Basis

The entities that operate in the agricultural activity, during the management must make decisions, which depend a lot on the information that is available in the opportune moment. Timely information and reliable accounting records are essential in this process. For the measurement of biological assets at fair value, there must be an active market. The fair value is based on the current location and condition of the asset and will therefore result from its price in the relevant market. There may, however, be advantages and disadvantages in the use of fair value in the measurement of a biological asset, a topic that will develop in this article.

scholarly journals Fair Value Accounting: measurements of biological assets in praxis and perspectives of accounting professionals in the Brazilian sugarcane sector

2018 ◽  
Vol 37 (4) ◽  
pp. 143-162
Author(s):  
Rafael Todescato Cavalheiro ◽  
Regio Márcio Toesca Gimenes ◽  
Erlaine Binotto
Keyword(s):  
Cluster Analysis ◽  
Population Sample ◽  
Fair Value ◽  
Point Of View ◽  
Exact Test ◽  
Professional Groups ◽  
Advantages And Disadvantages ◽  
Accounting Professionals ◽  
The Impact ◽  
Fair Value Measurements

This study aimed to analyze the context of fair value measurements of biological assets under the accounting professionals’ perspective from the Brazilian sugarcane sector. Secondly, verifying the existence of clusters among the participants of the study and also checking whether or not there is a relationship between the accounting professional’s profile and his perception of the impacts on the measurement of biological assets. A field study was carried out utilizing a survey with qualitative and quantitative approach, involving cluster analysis, content analysis and Fisher’s exact test, considering a population sample of 32 accounting professionals from the sector. From the cluster analysis it was possible to identify the existence of three professional groups with similar characteristics of profile and perception of impacts brought by IAS nº 41. The quantitative analysis shows that the professionals that work in plants located in states with high or low concentration of sugarcane productive chain perceive the rule distinctively. The qualitative analysis suggest that there are two views, one against and the other in favor of the rule, showing that there is not a consensus when it comes to enforcing the rule in the sector. As few studies attempt to analyze the impact, advantages and disadvantages from the accountant’s point of view, this study contributes to fill out this gap. This study offers insights to the governing entities on the necessity of a greater practical detailing and problems related to the acceptance of the rule in Brazil.

scholarly journals THE THEORY OF ECONOMICS AND ORGANIZATION OF AGRICULTURAL FARMS IN THE CONTEXT OF NATIONAL ACCOUNTING STANDARD NO.12. “AGRICULTURAL ACTIVITIES”

2019 ◽  
Vol XXI (2) ◽  
pp. 153-161
Author(s):  
Tomasz Kondraszuk
Keyword(s):  
Information Economics ◽  
Fair Value ◽  
Agricultural Activity ◽  
Accounting Standard ◽  
Concepts And Categories ◽  
Agricultural Enterprises ◽  
National Accounting ◽  
Valuation Process ◽  
Accounting Model ◽  
The Right

The main purpose of the article is to present a critical assessment of the regulations in (National Accounting Standard) NAS No. 12 Pertaining to „Agricultural activity” against the background of the theory of economics and organization of agricultural enterprises (farms). The key issue concerns the compliance of concepts and categories regarding the measurement of the achievements of these agricultural enterprises (farms). The biological character of agricultural production casts doubt over the effectiveness of the traditional accounting model based on the historical cost principle and the principle of implementation, as it fails to properly reflect the effects of economic events related to agricultural activity (biological transformation). In particular, this applies to profit or loss arising at the time of initial recognition of the biological assets’ component at fair value (farm-gate price). A result which is established in such a way is, in other words, a profit or loss resulting not from sales but from production. This, however, is the right approach as far as agricultural activity is concerned, due to the fact that the categories of production are key measurements for the assessment of farm performance. Unfortunately, draft NAS No. 12 concerning „Agricultural Activity” fails to take this important fact into account which means that fair value is omitted during the valuation process. It introduces subjective methods of determining the costs of production of agricultural products, which violate the principle of „information economics” and its usefulness („the principle of the advantage of content over form”) and prevents the construction of a consistent system of concepts and categories in agriculture.

Variable Lifetime Annuities: Can You Live Long Enough To Receive Fair Value?

2011 ◽  
Vol 15 (2) ◽  
pp. 49
Author(s):  
Ronald A. Milne ◽  
Glenn Vent
Keyword(s):  
Effective Means ◽  
Fair Value ◽  
Retirement Income ◽  
Rates Of Return ◽  
Variable Annuities ◽  
Advantages And Disadvantages ◽  
Inflation Rates ◽  
Retirement Funds ◽  
To Receive

<span>This article presents an analysis of variable lifetime annuities and quantifies the advantages and disadvantages associated with this type of instrument. Given recent long-term rates of return and current low inflation rates, variable annuity contracts provide an effective means of compensating for inflation. An individual only needs to invest a small portion of retirement funds in variable annuities to protest the entire portfolio against the risk of long-term inflation without the risk of having ones entire retirement income based on variable annuities.</span>

Fair value in financial statements after financial crisis

2015 ◽  
Vol 16 (3) ◽  
pp. 312-332 ◽  
Author(s):  
Daniela Majercakova ◽  
Miroslav Skoda
Keyword(s):  
Fair Value ◽  
Theoretical Background ◽  
Research Approach ◽  
Fair Value Accounting ◽  
Current Crisis ◽  
Group Discussions ◽  
Content Type ◽  
Historical Cost ◽  
Advantages And Disadvantages ◽  
The Cost

Purpose – The purpose of this paper is to examine and depict the advantages and disadvantages connected to the fair value, providing the reader with objective information and thorough insight into the problems and benefits of fair value. Partial objectives of this paper are to define the concept of fair value, to provide information about theoretical background and evolution of fair value and to examine and describe the possible future development of fair value. Design/methodology/approach – Findings in the paper are based on study of existing literature and also on study using the open-ended approach of grounded theory, including 50 interviews and two group discussions with professional accountants dealing with the fair value accounting in practice. Findings – According to the advantages and disadvantages of the concept of fair value in accounting, it is quite obvious and clear that this concept is far from being perfect. It is very difficult to determine whether its contribution to the improvement of accounting is really beneficial. Although the fair-value discussion seems to be far from over now, the current crisis provided an interesting setting to further explore these issues, understand them better and hopefully urge responsible institutions to fix the imperfections within the system to make it work correctly and more effectively. Research limitations/implications – Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further. Practical implications – This paper highlights that historical cost and fair value accounting must not be considered as competitors, as they serve different purposes. Knowledge of fair value is important, although it is not enough. Users also need to know the cost of the investment. In fact, knowing how much resources have been sacrificed to obtain that fair value, they could effectively evaluate stewardship. As a consequence, the adoption of a dual measurement and reporting system should be considered and discussed at a standard setting level. Originality/value – This paper fulfils an identified need to study how fair value accounting can be useful in the future.

Classification and modeling of integrated accounting and planning of costs for the production of agricultural products

2021 ◽  
pp. 20-30
Author(s):  
Rolan Arkhipovich Alborov ◽  
Lyudmila Ivanovna Khoruzhy ◽  
Svetlana Mikhailovna Kontsevaya ◽  
Gregory Rolanovich Alborov
Keyword(s):  
Cost Management ◽  
Management Accounting ◽  
Transfer Pricing ◽  
Fair Value ◽  
Agricultural Products ◽  
Agricultural Activity ◽  
Total Production ◽  
Net Income ◽  
Cost Planning ◽  
Planning Methods

Agricultural activity is a complex process where various resources, organizational forms of production, labor and payment are used. In this regard, the issues of the development of cost management for the production of agricultural products and the results of its production are becoming topical. A special place in the development of cost management for the production of agricultural products is occupied by management accounting of these costs, as well as their control and analysis. Therefore, the article has improved the classification of costs in agriculture based on the operation of basic economic laws and the practical need for management accounting and planning. Methods for determining the total production cost of products, gross (marginal) income, operating net income, operating profit are proposed. A model of the integrated organization of accounting and cost planning in the agricultural management system has been developed. A methodology for establishing fair value and transfer pricing for agricultural products, as well as a method for accounting for these products, is proposed.

A comparative analysis of the use of fair value and alternative valuation methods in IFRS

2021 ◽  
Vol 22 (9) ◽  
pp. 986-1000
Author(s):  
Viktor G. GET’MAN ◽  
Vladislav S. KARTASHOV
Keyword(s):  
Comparative Analysis ◽  
Comparative Study ◽  
Conceptual Framework ◽  
Financial Reporting ◽  
Systems Analysis ◽  
Scientific Research ◽  
Fair Value ◽  
Valuation Methods ◽  
Advantages And Disadvantages ◽  
Data Grouping

Subject. This article analyzes the various types of value used in IFRS to assess assets and liabilities. Objectives. The article aims to conduct a comparative analysis of the types of value used in IFRS when assessing assets and liabilities, and identify the features of the use of fair value as a type of value, considering the use of certain levels of fair value and restrictions on their use. Methods. For the study, we used the systems analysis, comparative study method, information structuring, data grouping, deduction, and other methods of scientific research. Results. The article summarizes the advantages and disadvantages of each of the valuation methods described in the Conceptual Framework for Financial Reporting – IFRS. It systematizes the standards that use certain types of value, and analyzes the features of the use of fair value. The article also identifies factors that affect the ability to measure a higher level of fair value. Conclusions. Fair value is one of the most used valuation methods in international accounting practices. However, the use of fair value in estimating the value of reporting items is limited due to the complexity and high cost of its qualitative valuation. This makes companies use alternative valuation methods.

Management aspects of accounting for biological assets and agricultural products

2020 ◽  
pp. 8-18
Author(s):  
Rolan Alborov ◽  
Lyudmila Khoruzhy ◽  
Stanislava Kontsevaya ◽  
Gregory Kontsevoy
Keyword(s):  
Fair Value ◽  
Agricultural Products ◽  
Agricultural Activity ◽  
Control Functions ◽  
Economic Decisions ◽  
Strategic Direction ◽  
Agricultural Organizations ◽  
Government Grant ◽  
Methodological Aspects ◽  
And Control

Agricultural activity is a strategic direction of the work of agricultural organizations, ensuring food independence and security of the country. In this regard, in modern conditions there is an objective need to improve the management of biotransformation of biological assets and its accounting and control functions. The work defines the objects of management and accounting of agricultural activity: biological assets; agricultural products; income, expenses and financial results from biotransformation of biological assets; government grant related to a biological asset measured at fair value less costs to sell. Recommendations are proposed on the determination and analysis of changes in the fair value of biological assets less costs to sell due to changes in unit prices and the amount of these assets. In addition, methodological aspects of monitoring the effectiveness of the use of biological assets and the production of agricultural products collected from them are identified. Each of these indicators provides indicative indicators, methods of calculation and comparison with similar indicators of the base period or planning. The following are methods for determining individual indicators from the proposed system that allow organization managers at all levels of internal management to make scientifically sound economic decisions to improve the efficiency of the processes of biological transformation of biological assets and agricultural production in agricultural organizations.

scholarly journals Amendments to the IAS 41 and IAS 16 – implications for accounting of bearer plants

2016 ◽  
Vol 62 (No. 4) ◽  
pp. 160-166 ◽  
Author(s):  
S. Bozzolan ◽  
E. Laghi ◽  
M. Mattei
Keyword(s):  
Fair Value ◽  
Agricultural Activity ◽  
Practical Application ◽  
Value Model

Under the IAS-IFRS standards, agricultural activity is accounted for using a fair value model. In 2014, the IASB amended the accounting treatment for bearer plants with the aim to address some concerns that have emerged since the application of the IAS 41. The amendments require that bearer plants be accounted for like property, plant and equipment (IAS 16). In the paper, there are analysed the aspects introduced by these amendments, moving from the IASB project. In particular, the reasons that led to these amendments are explained and it is explored whether all the concerns previously identified by accounting scholars and practitioners have been addressed. Moreover, there are identified some possible obstacles to the practical application of the amendments to the IAS 41.

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