The Recognition, Measurement and Disclosure of Biological Assets of Selected Agritourism Farms in Region IV-A, Philippines

The accounting standard for agriculture was introduced to harmonize the accounting procedures of entities engaged in agricultural production. This accounting standard for agriculture specifies the accounting treatment for biological assets and their biological transformation as well as how it must be reflected in the financial statement. However, there has been little awareness of applying the standard, especially in the agritourism industry. Agritourism is a young industry in the Philippines and is seen as a profitable revenue-generating investment. Therefore, education on financial management and recordkeeping must be given importance. This study assessed the accounting practices of selected agritourism farms in Region IV-A, Philippines, in accordance with the Accounting Standard for Agriculture, 41. The International Accounting Standard 41 and Philippine Accounting Standard 41 cover the recognition and measurements of biological assets and the presentation and disclosure of biological transformation. Interviews were conducted with 17 farms and their financial records were reviewed. The results show that most farms do not recognize and measure their biological assets per accounting standards. The recognition and measurement of biological assets are based on their current practices and are not influenced by the provision of the standards. Moreover, the type of business registration, i.e., corporation or sole proprietorship, affects the accounting practice of the farm. Their records do not accurately reflect the presentation and disclosure of biological assets and biological transformation. Thus, it is recommended that training, seminars, and workshops on IAS/PAS 41 must be conducted, and an application guideline must be developed to improve the accounting practices of agritourism farms and their compliance with the accounting standard.