International Accounting Standard (IAS) 41: What are the implications for reporting forest assets?

Herbohn, Kathleen F. and Herbohn, John L. (2006) International Accounting Standard (IAS) 41: What are the implications for reporting forest assets?. Small-Scale Forest Economics, Management and Policy, 5 2: 175-189. doi:10.1007/s11842-006-0009-1

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Author Herbohn, Kathleen F.
Herbohn, John L.
Title International Accounting Standard (IAS) 41: What are the implications for reporting forest assets?
Journal name Small-Scale Forest Economics, Management and Policy   Check publisher's open access policy
ISSN 1447-1825
Publication date 2006
Sub-type Article (original research)
DOI 10.1007/s11842-006-0009-1
Open Access Status File (Author Post-print)
Volume 5
Issue 2
Start page 175
End page 189
Total pages 15
Editor S. R. Harrison
J. L. Herbohn
Place of publication Australia
Publisher The University of Queensland. School of Natural and Rural Systems
Collection year 2006
Language eng
Subject C1
300699 Forestry Sciences not elsewhere classified
620305 Integration of farm and forestry
Formatted abstract
This paper investigates the implications of International Accounting Standard 41 (IAS 41) for European Union (EU) entities reporting on material holdings of forest assets. To all intents and purposes, Australia has been a test for IAS 41 because of the close similarities between IAS 41 and the relevant Australian regulation on forestry that has been operational for the last four years. The Australian reporting experience is used to identify potential implications for EU reporting entities. Evidence suggests that constituents’ key concerns with IAS 41 relate to the measurement of biological assets at fair value and the inclusion in income of unrealised gains or losses from measuring these assets at fair value. These concerns are borne out by the Australian experiences. Evidence is presented that suggests that compliance with IAS 41 will allow statement preparers a choice of methods to determine the fair value of timber assets. Additionally, it seem likely that the recognition of unrealised gains and losses from timber assets from changes in fair value and the harvest of agricultural produce will markedly affect income statements, introducing greater volatility into reported income. The impact has been greater for government departments. The median timber gain expressed as a percentage of net profit ranged from 44.5% to 79.9% in individual years. An unresolved issue has been identified – do such accounting procedures reflect the nature of investment in forestry?
Keyword Agricultural accounting
International accounting standards
Forestry accounting
IAS 41
AASB 1037
Q-Index Code C1
Additional Notes In 2007, Journal title continued by: Small-Scale Forestry (Springer, ISSN: 1873-7854)

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
School of Agriculture and Food Sciences
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Created: Fri, 19 Feb 2010, 13:09:22 EST by Therese Egan on behalf of School of Integrative Systems