Research On Measurement Of BiologicalAssets

As the basic industry of our country, agriculture occupies an important position in china’s economy. The main feature of agriculture is that it’s the course and combination of living organisms’ (including plants, animals and microorganisms) natural reproduction and human beings’ action. Therefore, recognition, measurement and reporting of the agricultural activities becomes more complex and special. Agricultural listed corporations reflect the overall level of china’s agriculture industry. So their condition and development has a large impact on the future of china’s agriculture industry. In recent years, some agricultural listed corporations’ financial problems often emerged in newspapers. From Yinguangxia to Lantiangufen, lots of agricultural listed corporations’ financial problems are closely related to the recognition and measurement of biological assets. Biological assets are the most important assets of agricultural corporations, which constitute the main part of their assets. So biological assets have tremendous impact on agricultural corporations’ financial condition and operating results. In addition, biological assets are largely subjected to the natural environment and biological transformation in the course of their natural growth. These two feathers make measurement of biological assets’ number and value a big problem, which provides these companies a broad space for financial fraud and manipulation. It seriously affects the quality of agricultural corporations’ financial information.The measurement of biological assets lies in the dispute of accounting measurement attributes. China’s accounting standards provide fair value mode and historical cost mode currently. These two modes have different accounting methods. They have their advantages and corresponding problems. Choosing the right accounting measurement mode that can solve the measurement problems and provide reliable and relevant information has a great significance for improving the quality of agricultural corporations’ financial information and biological assets accounting theory. This paper introduces the relevant provisions on definition, scope, recognition, measurement and reporting of foreign biological assets accounting standards and compares the differences between china’s current accounting standards and IAS41. On the basis of analyzing characteristics of biological assets, this paper sums up why agricultural corporations tend to manipulate recognition and measurement of biological assets. To prove it, this paper puts Zhangzidao as an example, making an objective analysis of the risky factors that bottom sowing culture industry is faced with. On the next, the paper focuses on the problems of Zhangzidao as follows:cost calculation of biological assets, calculation of the number, valuation of biological assets, impairments of biological assets. To solve these problems, this paper explores the most appropriate and applicable methods for initial and subsequent measurement of bottom seeding biological assets, which are meant to improve the quality of financial information of the bottom seeding cultivation corporations and to ensure the stable operation of them. Finally, from three aspects:recognition, measurement and reporting, this paper offers some advice on improving the current accounting standards. Firstly, classification criterion of biological assets should be considered. Secondly, fair value mode can be adopted step by step on the basis of regulating historical cost mode. Thirdly, the format of information disclosure should be standardized and contents of information disclosure should be added.