Abstract:
The agriculture international standard does not apply to issues
regarding agricultural crop lands and intangible agricultural assets, aspects
that are included in the IAS 16 (or IAS 40), respectively IFRS. The integrated
companies apply the IAS 41 Standard first, when operating with agricultural
activities as basic activity, and with industrial activities as secondary
activity. This particular standard describes the accounting procedures
referring to biological assets and agricultural harvest produce; the
accounting treatment and the governmental subsidies are all described in the
IAS 41 Standard. Financial analysis and interpretation IAS 41, as with any
value standard, users should pay particular attention to the disclosure of key
assumptions used to determine fair value and the consistency of those
assumptions from year to year. At the annual accounts or at the beginning of
the year, the biological assets must be evaluated at their fair value minus
point-of-sale expenses. Although, if on the initial estimation, the fair value
cannot be estimated realistically, the biological asset must be estimated at its
costs, minus collected amortization and any depreciation collected loss. Once
the fair value becomes realistic, the asset must be estimated at its fair value,
minus the point-of-sale costs. If there is an active market for a certain asset
or agricultural produce, the quote on that market is actually an appropriate
basis for estimating the assets’ fair value. If there is no such market, the
following criteria are used for the fair value estimation: - the most recent
market transaction price; - market prices of similar assets; - sector
standards.
