A comparative study of difficulties in accounting preparation and judgement in agriculture using fair value and historical cost for biological assets valuation
Author
García Blandón, Josep
Argilés Bosch, Josep M.
Sabata, Anna
Other authors
Universitat Ramon Llull. IQS
Publication date
2012-01Alternative title
Estudio comparativo de las dificultades para la realización de la contabilidad y la interpretación de la información en la agricultura aplicando coste histórico y valor razonable en la valoración de los activos biológicos
Abstract
This paper presents empirical research comparing the accounting difficulties that arise from the use of two valuation methods for biological assets, fair value (FV) and historical cost (HC) accounting, in the agricultural sector. It also compares how reliable each valuation method is in the decision-making process of agents within the sector. By conducting an experiment with students, farmers, and accountants operating in the agricultural sector, we find that they have more difficulties, make larger miscalculations and make poorer judgements with HC accounting than with FV accounting. In-depth interviews uncover flawed accounting practices in the agricultural sector in Spain in order to meet HC accounting requirements. Given the complexities of cost calculation for biological assets and the predominance of small family business units in advanced Western countries, the study concludes that accounting can be more easily applied in the agricultural sector under FV than HC accounting, and that HC conveys a less accurate grasp of the real situation of a farm.
Document Type
Article
Published version
Language
English
Subject (CDU)
33 - Economics. Economic science
Keywords
Agricultura--Comptabilitat
Cost--Control
Anàlisi del valor
Fair value
Historical cost
Biological assets valuation
Farm accounting
Pages
34 p.
Publisher
Asociación Española de Profesores Universitarios de Contabilidad
Is part of
Revista de Contabilidad: Spanish Accounting Review. Vol. 15, nº 1 (2012), pág. 109-142
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Rights
© EDITUM i ASEPUC
Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc-nd/4.0/