Floating Biological Assets and Agricultural Produce Accounting

The Article provides grounds for the proposal of keeping biological assets accounts, their evaluation and reflection in financial statements. Based on existing analysis of plants and animals by the criteria influencing their accountability, the need for differentiation in accounting and reporting has been grounded for crop production and livestock farming biological assets. It is proposed to qualify Account 21 as 'Livestock Youngsters and Livestock under Fattening' and use it for accounting of livestock floating biological assets. Expenditure for crop production is to be disclosed in Account 23 'Production' and not carried forward to Account 21 when making financial statement. It has been found that using the fair value for evaluation of biological assets and agricultural produce enables the display of subjectivity in accounting, gives way to unlimited misrepresentation of business activity financial outcomes and leads to the loss of the state control over business entities. According to the authors, the agricultural produce to be recorded as received should be evaluated as per its planned net cost adjusted to the actual one at the end of the air according to the calculation results. Constructed fair value of agricultural produce at the end of the year is also to be calculated to the level of the fair value obtained at the enterprise in the process of sale.