Fair Value of Biological Assets: An Analysis Based on Operating Cash Flow Forecasts

摘要

This article aims to analyze whether the financial information about the fair value of biological assets has predictive power on future operating cash flows, analyzing the balance, the variation and the method of measuring the fair value of biological assets. For the sample, we considered the companies listed on the Brasil, Bolsa, Balcdo (B3) and those that presented a balance of biological assets in their accounting statements. The sample was composed of seven companies that presented all the necessary data for analysis, during the quarterly periods from 2010 to 2019, totaling 245 observations. All data were obtained through the Economatica, the companies' explanatory notes and the B3 website. As for the analysis method, we used the model proposed by Dechow, Kothari and Watts (1998) and Barth, Cram and Nelson (2001), which assumes that the current operating cash flows and total accruals would have predictive power over the future operating cash flows of companies, and new variables were added to the model to analyze the proposed research hypotheses. All models were analyzed using multiple linear regression with balanced panel data. The results show that the variation in the fair value of biological assets presents predictive power for operational cash flows after three years. This occurs because most biological assets have a long maturation period and only affect the operational cash flow after several periods (H2). This result serves as a signal to investors that information about the fair value of biological assets can be important for decision making in companies that hold this type of asset. It was also verified that the fair value measurement method does not affect the predictive power of future operational cash flows (H3), as well as the balance of biological assets reported in the balance sheet of the companies (H1).