Public welfare biological assets are also defined as a kind of biological assets, because public welfare biological assets owned or controlled by enterprises can not directly bring economic benefits to enterprises, but have service potential, which helps enterprises to obtain economic benefits from related assets, thus meeting the conditions for confirming biological assets. Consumable biological assets refer to biological assets held for sale or harvested as agricultural products in the future, including growing field crops, vegetables, timber forests and livestock for sale. Productive biological assets refer to biological assets held for producing agricultural products, providing services or renting, including economic forests, firewood forests, livestock production and draught animals. Public welfare biological assets refer to biological assets with protection and environmental protection as the main purpose, including windbreak and sand fixation forests, soil and water conservation forests and water conservation forests.
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abstract
As an economic resource, biological assets, like other assets, are managed by enterprises to seek the cost measurement of seedlings under the biological assets criterion.
Biological assets and other assets have the same meaning to enterprises, so that the capital when the investment is recovered is greater than the original investment. However, due to the different forms of biological assets and different value transformation mechanisms, based on the interweaving characteristics of natural reproduction and economic reproduction of animals and plants, biological assets have biological characteristics different from other assets, mainly in the following aspects:
Biotransformation and nature appreciation
Biological assets are living animals and plants, so they have their own natural laws of growth, development, reproduction and decline. They rely on these natural laws and the promotion of human labor to realize their own transformation, such as growing from a seed to a big tree. Because biological assets are the result of interweaving natural reproduction and economic reproduction, biological assets continue to naturally increase in value in the process of growth.
growth cycle
Biological assets are living animals and plants. Because of its own special growth law, its growth has to go through several stages, namely, assets with life cycle. And the life cycle of different biological assets is different. Some biological assets have a long life cycle, such as trees, more than ten years or even hundreds of years, and some biological assets have a short life cycle, such as ordinary crops, within one year.
diversification
Different biological assets have their own growth and development characteristics, and the differences are very obvious. For example, plants and animals have completely different growth and development laws.
Regional differences
Both animals and plants depend on the natural environment, and the natural conditions in different regions lead to the regionality of biological assets. For example, crops and forest assets grow in a certain geographical position on the earth, so the differences in natural conditions such as temperature, humidity, light, precipitation and soil fertility attached to this area will affect the growth potential of crops and forests and the quantity and quality of future products. Therefore, biological assets in different regions show regional differences.
Provide characteristics of by-products
Some biological assets can provide a variety of agricultural and sideline products, such as milk provided by cows. However, the by-products provided by the same animal or plant vary greatly in quantity and quality.
The indispensability of attachment
Biological assets, as living animals or plants, are generally inseparable from their attachments. For example, forests and crops are attached to the land, and fish and marine life are attached to rivers and water systems. Once these biological assets are separated from their attachments, they no longer belong to the category of biological assets, such as the harvest and death of biological assets.
Dual asset characteristics
Biological assets have the dual characteristics of liquid assets (consumable biological assets) and long-term biological assets (productive biological assets and public welfare biological assets). And can be transformed into each other under certain conditions. Such as cattle, sheep and other biological assets, when human beings aim to obtain products such as meat and skin, these cattle and sheep can only be used once, and their value is transferred once, which means they have the nature of liquid assets; When human beings aim at obtaining wool, milk and other products, these cattle and sheep can be reused, and their value gradually shifts, that is, they have the nature of long-term assets; But generally speaking, public welfare assets have the nature of long-term assets, such as windbreak and sand-fixing forests, water conservation forests, etc., and their growth cycle and value recovery period are longer.
Uncertainty of future economic benefits
There are many uncertain factors during the existence of biological assets, such as the limitation of crops by natural conditions, especially natural disasters such as floods and hurricanes, which have great harm to the growth and yield of crops, and the occurrence of animal diseases also makes the future economic benefits of biological assets very uncertain and high-risk.
Edit the selection of measurement mode in this paragraph.
Selection of international accounting standards
The recognition conditions of biological assets in international accounting standards are the same as other assets, except for the study of accounting measurement mode of biological assets.
In addition to two conditions, it is specially stipulated that "the fair value or cost of the asset can be measured reliably", which means that the confirmation time of biological assets or agricultural products may be earlier than that of assets confirmed according to other standards. For example, for newborn animals or newly harvested agricultural products, IAS4 1 requires that as long as its fair value can be measured reliably, regardless of whether its cost can be measured reliably, regarding biological assets, IAS4 1 Paragraph 12 stipulates that biological assets shall be measured according to their fair value minus the expected expenses at initial recognition and each balance sheet date, unless the fair value mentioned in paragraph 30 cannot be measured reliably. According to the provisions of IAS4 1 Paragraph 13, the agricultural products harvested from the biological assets of an enterprise shall be measured according to the fair value minus the expected expenses before sale. If the market price or value of a biological asset at the time of initial recognition cannot be determined, and other fair value estimates are obviously unreliable, the biological asset shall be measured at its cost minus accumulated depreciation and accumulated impairment losses. If the fair value of a biological asset can be measured reliably, the enterprise shall measure it according to the fair value minus the estimated expenses incurred until the sale. And this exception may only exist at the time of initial recognition. Once an enterprise uses the fair value model to measure biological assets, even if the fair value cannot be determined reliably in the future, it should continue to use the fair value model until the biological assets are disposed of. It can be seen that under the provisions of international accounting standards, enterprises have no choice in measuring biological assets. As long as the fair value can be determined reliably, they can only be measured by fair value.
The Choice of Accounting Standards in China
China is a big agricultural country, but its agricultural infrastructure is weak, its capital is insufficient and its productivity level is low. Agriculture is one of the industries that have been hit hardest after China's entry into WTO, but China lacks suitable accounting standards for biological assets to regulate agricultural economic activities. At the same time, with the development of economic globalization, it is necessary for agriculture to introduce technology and capital, carry out international cooperation, and provide relevant accounting information to eliminate foreign investors' misunderstanding and doubts about China's agricultural financial statements. Therefore, it is very necessary to establish biological assets accounting standards suitable for China's national conditions in time. In the second half of 2005, China issued a draft of new accounting standards, and in February 2006, it issued the latest 38 accounting standards for enterprises, and required them to be implemented in listed companies from 1 in 2007. Among the latest 38 standards, accounting standards for biological assets are included. China's latest Accounting Standards for Business Enterprises No.5-Biological Assets clearly stipulates in Article 6 that biological assets should be initially measured according to cost, and in Articles 7 to 15, how to calculate the initial cost of various biological assets is explained respectively. Articles 17 to 2 1 stipulate the requirements and methods for the subsequent measurement of biological assets. It is only stipulated in Article 22: "If there is conclusive evidence that the fair value of biological assets can be obtained continuously and reliably, the fair value of biological assets shall be measured. Fair value measurement shall meet the following conditions at the same time: (1) There is an active trading market for biological assets; (2) The market price and other relevant information of similar or similar biological assets can be obtained from the trading market, so as to make a reasonable estimate of the fair value of biological assets. It can be seen that the measurement of biological assets in China adopts the historical cost measurement model, and the fair value measurement model is adopted only under special circumstances.
Reasons for China's Choice of Historical Cost Measurement Model
The financial information provided by historical cost measurement mode happened in the past and has strong reliability. However, with the change of the objective environment, this information may be inconsistent with the reality, that is, the correlation is weak. The financial information provided under the fair value measurement model just makes up for the lack of correlation, but at the same time, due to the estimation and judgment in the measurement process, the reliability of accounting information is reduced. In the latest accounting standards of our country, the measurement of biological assets still adopts the historical cost measurement model, but only adopts the fair value measurement model under certain conditions. The reasons are as follows: 1. Generally speaking, China's agricultural enterprises are large in number and small in scale, and are mainly family-run. Such enterprises usually do not require or have the ability to provide financial reports to the outside world. At present, there are only more than 40 agricultural listed companies with agriculture as their main business in China. Therefore, it is unrealistic to use the fair value model to measure biological assets in China at present. 2. China's agricultural market system is not perfect, the product market and factor market are underdeveloped, and the degree of agricultural informatization is low, which is not suitable for adopting the fair value measurement model. Obtaining fair value requires a fully developed market. The market system of agricultural products is not perfect, so it is difficult to obtain useful information from agricultural products market and factor market, and it is impossible to determine fair value. Therefore, it is not appropriate for China to directly adopt fair value as the measurement model of biological assets at present. 3. China's capital market is not standardized. Only with the support of mature capital market, complete asset evaluation criteria system and perfect debt restructuring laws and regulations can fair value measurement really play its role. Otherwise, enterprises will treat the difference in fair value measurement as the result of gains or losses included in profits and losses, which will have a great impact on the stability of enterprise asset value and the profits and losses of enterprises. Especially in listed companies, it is easy for enterprises to manipulate profits and whitewash accounting data, thus reducing the quality of accounting information. 4. The professional quality of agricultural employees in China is low, and their professional judgment ability needs to be improved. The measurement of fair value requires accountants to have superb professional judgment ability. To obtain high-quality fair value information, accountants not only need to have rich knowledge of accounting theory and practice, but also need to understand and evaluate related knowledge such as finance and capital market. However, among the existing accounting practitioners in China, their overall quality is not high, which will directly affect the level of professional judgment, thus restricting the use effect of the fair value model. 5. The corporate governance structure is not perfect. In some companies in China, it often happens that one person serves as both the board of directors and the board of supervisors, and the binding force of the shareholders' meeting on senior managers is ineffective, which leads to the board of directors and senior financial managers actually controlling accounting work. Accounting information has the function of supervising and evaluating the ability, performance and moral level of the board of directors and senior managers. Therefore, when using the fair value measurement model, it is easy for the board of directors and senior managers to manipulate accounting data for personal gain. 6. The construction of credit mechanism needs to be improved. Although honesty is a moral standard, if it is lacking in today's society, even if other conditions such as accounting system, corporate governance structure and capital market are perfected, it can't prevent fraud. The integrity level and professional level of intermediaries and enterprises themselves need to be improved. Therefore, it is necessary to establish a mechanism of honesty and responsibility, and make clear the standard of judging honesty and the cost of violating honesty. However, in our country, the establishment of credit mechanism is still in the process of perfection, and events that violate credit still occur from time to time, which is very unfavorable to the application of fair value model. 7. Obtaining the fair value of assets in the market requires a certain cost. Therefore, the principle of cost-effectiveness must be considered when selecting the measurement mode. If the cost of obtaining fair value is too high, enterprises are likely to give up adopting fair value and adopt historical cost. To sum up, it is necessary for China to adopt the historical cost model to measure biological assets at this stage. However, due to some advantages of fair value and its significance to the convergence of Chinese standards and international standards, China also clearly stipulates that biological assets can be measured at fair value in the latest standards. It can be said that at present, the measurement of biological assets in China is "mainly based on historical cost measurement, supplemented by fair value measurement", but under the restriction of realistic conditions, fair value has not played a great role in China. I believe that with the continuous improvement of the macro environment (the improvement of the agricultural market system and capital market, the establishment of credit mechanism, etc.). ) and micro conditions (the improvement of corporate governance structure and the improvement of the quality of agricultural employees, etc. ), the fair value model will be the main way to carry out biological assets.