Challenges of agricultural entities in financial reporting: Case of Albania

Agriculture sector remains an engine of Albania's economic growth, statistical data indicates that agriculture accounts for as much as 20% of GDP or in employment about 50% of the active power. According to data published from INSTAT in 2016 the number of registered economic units was 321,358, where 10% were engaged in the agricultural sector or about 1,287 entities operating as natural person or legal person and 31,372 farmers who have an agricultural activity. For the purpose of financial reporting, all entities registered in tax authorities, should use the improved accounting standard number 13 for the recognition and evaluation of biological assets. The implementation of this standard is important by making comparable accounting information on biological assets offered by these companies which exercise economic activity in the field of biological assets. But when we consider accounting procedure problems, it is noticed that exits a small amount of information about the rules, techniques, and list of accounts that guide us to a correct and believable view. We have come to the conclusion that besides the other arguments this phenomena occurs beacause, agricultural accounting has not been developed as a course in any faculty in our country meanwhile the Faculty of Economics and Agribusiness has added to its curriculum during the last three years. For this reason, we have undertaken in this paper the challenge to find out which are the crucial problems faced by Albanian entities during financial reporting and some of the solutions that will help these units to provide the appropriate information for tax intention and for owners to take the right decisions so they can have a sustainable business. To come to the right conclusions we will conduct a review on the literature on the evolution of accounting in agriculture in Albania as well as in the world. Likewise, preliminary data will be provided through interviews with the makers of financial reports, which will be analyzed descriptively.