Chapter 39 Study on Measurement Attributes of Biological Assets in Chinese Agribusiness

摘要

Since biological assets were main component of agriculture enterprises' assets, selection of appropriate measurement attribute for biological assets became important for agriculture accounting. International Accounting Standard 41 allowed both historical cost and fair value to measure biological assets. More importantly, it introduced fair value measurement as the preferred selection for biological assets. In 2006, China announced CAS5 which required that biological assets should be measured on the basis of historical cost at initial recognition and subsequent reporting period. However, use of fair value was allowed in CAS5 only when biological assets' fair value could be reliably obtained. Based on biological asset's nature, the article discussed arguments on using historical cost or fair value to measure biological. On one hand, using historical cost to measure biological assets was reliable but irrelevant. On the other hand, using fair value to measure biological assets was relevant but unreliable. The article strongly suggested a hybrid measurement model should be taken on this stage in China which represented majority of Chinese academician's opinion.