NEED FOR ADAPTING AND ADJUSTING IAS 41 TO THE PORTUGUESE AGRICULTURE SECTOR

Abstract

The agricultural sector represents in Portugal a somewhat significant part of Gross Domestic Product in Portugal and has already been the principal sector of economic activity in the country, One consequence of this is that its exploitation has always been structured, and not always with considerations sensitive to market signs, and didn’t deserve special attention in the structuring of its financial information. Entry into the 21st century, into a globalized world where questions related to the standardization of financial information are the order of the day, the problems related to the discussion of accounting methods with phenomena connected to activities inserted into the agricultural sector all vindicate the need for the existence of a standardized method that favors the fulfillment of the objectives and the characteristics of financial information. It is by this measurement that our work discusses the value metrics that must be adapted for measuring the facts related to assets within the scope of these activities, specifically in regard to recognition and measurement of biological assets and agricultural products, based on the concepts set forth in the IAS 41. Starting from that point, using this standard we seek to verify in what conditions the value metric proposal can be made adaptable to Portuguese agricultural companies, and we distinguish the conditions of application in light of the structure and dimension of the units produced. We develop this approach further by relating it with accounting methods that must be applied to biological assets in their different phases, using as a reference the accounts plan inserted in the POC. Keywords: Biological asset. Agricultural product. Fair value. Capitalization of costs. Financial information.