Research On Measurement And Disclosure Of Accounting Income In Agriculture Activities

Scientific and reasonable accounting measurement is very significant to the improvement of the efficiency of enterprise property rights. In the market-economy environment, the accounting measurement of income is more important than that of assets to some extent, even can be seen as the core of accounting measurement.The complexity of the biology transformation process in agricultural activities leads to various difficulties about its accounting income measurement and information disclosure. And in the main, the operating units of agriculture activities are household-based, and there are few public companies. As a result, academic circles, practice circles and standard-setting institution have paid low attention to the theory and the practice on the accounting income measurement and information disclosure of agricultural activities for a long time. Only in recent several decades, with the increasing of the number of the agricultural public companies, the related research on the accounting income measurement and information disclosure of agricultural activity had been increasing. However, the research results which already have almost focus on setting the agricultural accounting principals, choosing measurement attribute of biological assets and calculating forest asset. There are few special research results on the accounting income measurement and information disclosure of agricultural activities. In this dissertation, the author chooses the accounting income measurement and information disclosure model of agricultural activities as the mainly research theme. It can not only enrich accounting theory researches, but also supply some valuable reference on setting principles of accounting income of agricultural activities and relative accounting practice operating.The main purpose of this dissertation is to analyze the accounting income measurement methods and the information disclosure models of agricultural activity of corporate enterprises, by using empirical analysis, normative research and comparative analysis. The main contents and findings are presented as follows:1. Discriminate important concepts of the accounting income measurement and information disclosure of agricultural activities. During a long period, economic scholars and accounting scholars have different opinions on the explanation of income. Economic scholars considered that the nature of income was the increasing of company's wealth. While accounting scholars took shape into two opinions which were based on the different definition of income: Current operating income perspective and all-inclusive perspective of income. In recent years, all-inclusive perspective of income has been accepted by accounting profession gradually, and it has dominated in accounting practice. In terms of available definition of accounting income, IASB gives the most typical one. It states that income means the increasing of economic interests in accounting period, excluding the increasing equity related to the assets which are invested by the equity participants. The main idea of the dissertation is that income derives from the company's operation and production, and it is the operating result rather than just the trade result. And this is an important feature of income.There are two measurement models for accounting income, the Revenue-Expense perspective and the Asset-Liability perspective. The former measures enterprises'income by matching revenue and expense, while the latter measures income basing on the changes of assets and liabilities. In this paper, the measurement of accounting income related to agricultural activities is thought to be a kind of derivative measurement, whose outcome can't be obtained directly, but must rely on the measures of revenues and related expenses from agricultural activities. What's more, the paper emphasizes the biological assets'initial value affirms and following appreciation affirms should be recognized as revenues rather than gains.2. The analysis and comment of international and domestic accounting criterions of income measurement and information disclosure related to agricultural activities. According to the analysis and comment about agricultural accounting criterions, we can get the following opinion: in most of the foreign countries, except America and Canada, biological assets are measured at fair value, and that biological assets appreciation being recognized as a part of accounting income from agricultural activities will be the trend. In China, the biological assets have been measured at their historical cost for a long time. Although the new accounting principle about biological assets, published in 2006, lists fair value as measure attribute, it is still hard to use it due to harsh precondition, which demonstrates that the standard-setting institution is not willing to measure biological assets at fair value widely. When biological assets are measured at historical costs, the accounting incomes related to agricultural activities are mainly composed of revenues obtained from the realization of the trade of agricultural products and biological assets, however, the appreciations not realized can't be accepted.3. The international and domestic situations of accounting income measurement and information disclosure related to agricultural activities and its logic. By analyzing the financial report of the agriculture-related listed companies in 2007 at overseas or domestic level, we found that both the domestic and international companies have the problems that the information disclosed is not adequate and standard. In view of the situation, this paper states that the appreciation of biological assets is both the objective economic reality and the positive result of agricultural companies'normal business activities, so to measure the appreciation of biological assets and disclose the information in accounting system is an essential requirement to ensure accounting information's quality.4. Design and explore the specific model of accounting income measurement and information disclosure related to agricultural activities. About this part, this paper puts forward three proposals as follows, which not only according with the overall requirements of international accounting convergence, but also conforming the special accounting environment in our country:(1) Biological assets value's measurement model. The measurement of biological assets is the key of agriculture activities accounting's income measurement. From the viewpoint of its usefulness, disclosing the value changes information of the biological assets whose growth cycle is less than a year has little meaning. For saving accounting operation cost, we don't have to adopt the fair value to measure those biological assets. However, the value changes of the biological assets whose growth cycle over a year have more information, it should be measured at fair value. Taking timber, beef, dairy cattle, and fruit trees for examples respectively, this paper constructs value's measurement models for different types of biological assets.(2) Agricultural activities'cost cycle procedure and income determination model. To a certain extent, the special nature of agricultural activities will have an important effect on the Agricultural activities'cost cycle procedure, income determination and calculation. In order to provide theoretic guidance to practice, based on different agricultural activities, taking the forest assets, fattening cattle, fruit trees assets, and cow for examples respectively, this paper constructs the cost cycle procedure and the income recognition model of Agricultural activities in operating different types of biological assets.(3) Accounting income information disclosure model and the logic of availability of agricultural activities. This paper proposes that the accounting income disclosure of our country's agricultural activities should include"inside and outside-sheet"disclosure. Inside-sheet disclosure mainly revolves Balance Sheet and Income Report. In order to"reflect accurately"some items, such as"short-term biological assets","long-term productive biological assets","long-term consumptive biological assets"and so on, should be added in the Balance Sheet to reflect the number of every type of biological assets which are belonged to agricultural listed companies. The items such as"biological activities revenue","biological activities cost"and"biological activities appreciation income"should be added in Income Report to disclose the composition of biological activities profit. Outside-sheet disclosure should include the following information, the types of agricultural activities and the classification of biological assets, the increase or decrease of biological assets, the agriculture accounting policies and estimations adopted by enterprises, operation risk and management methods of agricultural activities, the government subsidies related to agriculture.Finally, this paper points out that the difficulty in measuring biological assets'appreciation and disclosing the information is how to use fair value correctly. And in order to enhance the verifiability of biological assets'appreciation information, the government, companies, intermediary agencies and information users must act together.