Biological assets and the agricultural products in the context of the implementation of the IAS 41: A case study of the Romanian agro-food system

Abstract

Nowadays, when the contribution of agriculture and agro-food industry to the GDP is a significant, in Romania’s case we appreciate that the economic aspects of this area also deserve a specific approach. The aim of this paper was to identify the incompatibility of the recognition and assessment criteria of agriculture production, biological assets and agriculture products imposed by the application of these standards in agro-food companies, and to analyze its effects concerning the financial position and performance of these entities. The paper takes into consideration the economic-financial harmonization process, which is now in full progress, both in the EU and other states, by applying the specific standards (IAS/IFRS) in the preparation of annual/interim financial reports. Finally, referring strictly to the case of Romania, after thorough research into the field in question, we suggest a presentation of the controversial assessment criteria provided by the IAS 41 standard, and also refer to the difficulties related to the implementation of this standard in the agro-food industry.

Keywords

• agriculture production
• biological assets
• IAS 41
• assessment
• fair value
• cost