IAS 41 Implementation Challenges – The Case of Romania

Authors: Liliana Feleagă, Niculae Feleagă, Vasile Răileanu

Abstract:

Although agriculture is an important part of the world economy, accounting in agriculture still has many shortcomings. The adoption of IAS 41 “Agriculture” has tried to improve this situation and increase the comparability of financial statements of entities in the agricultural sector. Although controversial, IAS 41 is the first step of a consistent transition to fair value assessment in the agricultural sector. The objective of our work is the analysis of IAS 41 and current accounting agricultural situation in Romania. Accounting regulations in Romania are in accordance with European directives and, in many respects, converged with IFRS referential. Provisions of IAS 41, however, are not reflected directly in Romanian regulations. With the increase of forest land transactions, it is expected that recognition and measurement of biological assets under IAS 41 to become a necessity.

Keywords: Accounting Agricultural, Biological Assets, Fair value, IAS 41

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1057361

References:

[1] IASB, IFRS: International Financial Reporting Standards IFRS - Consolidated without early application, LexisNexis Butterworths, 2011,
[2] J. M. Argilés, J. G. Bladon, and T. Monllau, ÔÇ×Fair value versus historic cost Valuation for Biological assets: Implications for the quality of financial information", Working Papers in Economics 215, Universitat de Barcelona. Espai de Recerca en Economia, 2009,
[3] K. Koiv, L. Lobjakas, V. Parts , and A. E. Visberg , ÔÇ×International accounting standard agriculture", Proceedings of International Scientific Conference dedicated to 50th Anniversary of the Estonian Agricultural University, Tartu (Estonia), 1-2 June, pp. 93-101, 2001,
[4] E. Grege-Staltmane, "Challenges in accounting the forests - a Latvian case Study", Annals Of Forest Research, vol. 53, no. 1, pp. 51-58, 2010,
[5] A. Burnside and S. Schiller, IAS 41 and the forest industry - A study of the forest products companies' perception of the IAS 41 today. Bachelor Thesis, Department of Business Administration, Göteborg University, 2005,
[6] C. Elad and K. Herbohn, Implementing fair value accounting in the agricultural sector, The Institute of Chartered Accountants of Scotland, 2011,
[7] PricewaterhouseCoopers, ÔÇ×Forest Industry: Application Review of IAS 41, Agriculture: The Fair Value of Standing Timber", Global Forest, Paper & Packaging, http://www.pwc.com/cl/es/publicaciones/assets/forest-industry.pdf, 2009,
[8] K. Herbohn and J. Herbohn, ÔÇ×International Accounting Standard (IAS) 41: what are the implications for reporting forest asstes?, Small-scale Forest Economics", Management and Policy, vol. 5, no. 2, pp. 175-189, 2006,
[9] C. Elad, "Fair value accounting in the agricultural sector: some implications for international accounting harmonization", European Accounting Review, vol. 13, no. 4, pp. 621 - 641, 2004,
[10] V. Lefter and A. G. Roman, ÔÇ×IAS 41 Agriculture: Fair Value Accounting", Theoretical and Applied Economics Review no. 5, pp. 15- 22, 2007,
[11] D. Mates and V. Grosu, ÔÇ×Evaluating and recognizing biological assets and agricultural activities according to IAS 41", Lucrâri ┼×tiinţifice, seria Agronomie no.51, pp. 457-462, 2008,
[12] A. Svensson, A. Nylén, and A.Gunnevik, How fair is fair? The Swedish Forest Industry-s Application of the IAS 41- Agriculture, Master-s Thesis, Stockholm School Of Economics, 2008,
[13] A. M. Jansson and A. Fagerström, "Accounting for forest assets: the case of IAS 41 and fair value", Proceedings of Business And Information, Bangkok, July 4-6, 2011,
[14] J. M. Argilés and E. J. Slof, "New opportunities for farm accounting", European Accounting Review, vol. 10, no. 2, pp. 361-383, 2001,
[15] A. E. Visberg and V. Parts, ÔÇ×Farm Accounting: the Present Situation and the Future in Estonia", Farm Management. Proceedings of NJF Seminar No. 345, 2-4 October, pp. 7-16, 2002,
[16] B. Booth and R. Walker, ÔÇ×Valuation of SGARAs in the wine industry: Time for sober reflection", Australian Accounting Review, vol. 11 no. 23, pp. 52-60, 2001,
[17] D. Aldea (Romanescu), ÔÇ×Inability credibly evaluation of just value in animal husbandry. Limits and developments", Scientific Papers Management, Economic Engineering in Agriculture and Rural Development, vol. 9, no. 2, pp 5-6, 2009,
[18] C. Elad, "Fair value accounting and fair trade: an analysis of the role of International Accounting Standard No. 41 in social conflict ", Socio- Economic Review, Vol. 5, No. 4 , pp. 755-777, 2007,
[19] M. Penttinen, A. Latukka, H. Meril├ñinen, O.Salminen, and E. Uotila, ÔÇ×IAS fair value and forest evaluation on farm forestry", Proceedings of Human dimension of family, farm and community forestry international symposium, March 29-April 1, 2004,
[20] C. Dowling and J. Godfrey, ÔÇ×AASB 1037 sows the seeds of change: a survey of SGARA measurement methods", Australian Accounting Review, vol. 11, no. 1, pp. 45-51, 2001,
[21] Y. H. Aryanto, ÔÇ×Theoretical Failure of IAS 41: Agriculture", http://ssrn.com/abstract=1808413, 2011,
[22] B. Barlev and J. R. Haddad, ÔÇ×Fair value accounting and the management of the firm", Critical Perspectives on Accounting, vol. 14, no. 4, pp. 383- 415, 2003
[23] M. Vuta, N. Vintilâ, P. Lazar and Mh. Vuta, ÔÇ×The impact of the fiscal regulations upon small and medium businesses sector in the context of fiscal competition", Metalurgia International, vol. 14, no. 8, pp. 160-165, 2009