Research On Accounting Recognition And Measurement Of Biological Assets

Living creature widely exists in nature.With the progress of the economy and society,more and more living creature is utilized by human beings,and now,it becomes a resource.When the enterprises are engaged in the production of biotic resources,the concept of biological asset emerges.As an asset of the enterprise,living creature has the commonness and specialty.In Feb 15,2006,the Ministry of Finance issued the Accounting Standards for Business Enterprises No.5-Biological Assets(abbreviated for CAS5),which aims to standardize the accounting recognition,measurement,disclosure,etc.of the biological assets.After ten years of execution,biological assets have become the main asset of the agricultural companies and some biopharmaceutical companies,and CAS5 is also used beyond agricultural companies.Because of the characteristics,like vast varieties,wide distribution,alive,and natural appreciation of the biological assets,some problems arise when recognizing and measuring the assets,which might lower the accounting quality.At present,research on the accounting recognition of biological assets in the academia concentrates in definition of concepts and scope of measurement,few are about the class limit,recognition time,recognition criteria and control.By reading the accounting standards of biological assets and analyzing accounting recognition in annual reports of 35 agricultural listed companies and 37 pharmaceutical manufacturing companies,finds that scope definition is incomplete,class limit is vague,etc.So this article suggests including microbiological assets to the standard,the classification of biological assets in accordance with the principal purpose of the enterprise,identifying control power of state-owed natural forests,and making assumptions about measurement standards and time of same kind biological assets.In the aspect of accounting measurement,the depreciation,impairment and measurement model selection of biological assets have been a concentration in the academia for years.Depreciation policy of similar biological assets is difficult to be unified,impairment of biological assets is difficult to measure reliably,and historical cost measurement is difficult to reflect the natural value increment,which are the problems of measurement of biological assets.This article suggests tightening regulation of depreciation and impairment,increasing the accuracy of measurement by agricultural informatization,perfecting using conditions and standards of fair value,and adapting following measurement to natural feature.