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New opportunities for farm accounting

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  • Josep Maria Argiles
  • Eric John Slof

Abstract

This paper starts out to observe that there is a gap between the importance given to accounting and the low level of bookkeeping and accounting practice in the agricultural sector. Reasons for this gap are that current general accounting rules do not adapt very well to the particularities of farming and are difficult and expensive to implement. We then suggest that the Farm Accountancy Data Network (FADN) and the recently issued International Accounting Standard on Agriculture (IAS 41) could be key elements to improve the use of accounting in European farms. We review the main contributions of IAS 41 and conclude that it provides a strong conceptual framework but might need further instruments for its implementation in practice, given the limitations of the agricultural sector. We continue to explain that FADN is an experienced network that has elaborated very detailed farm accounting procedures, and suggest that these procedures could be turned into a guide for implementing IAS 41. We report empirical data which indicate that current FADN reports are already considered useful by farmers for different purposes. Finally, we analyse in detail the compatibility of IAS 41 and FADN, identifying changes in the FADN procedures that would become necessary if the FADN procedures were to be used for implementing IAS 41 and some aspects of FADN that might have been worthwhile to consider for the final version of IAS 41.

Suggested Citation

  • Josep Maria Argiles & Eric John Slof, 2001. "New opportunities for farm accounting," European Accounting Review, Taylor & Francis Journals, vol. 10(2), pages 361-383.
    • Handle: RePEc:taf:euract:v:10:y:2001:i:2:p:361-383
    DOI: 10.1080/09638180126640
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    References listed on IDEAS

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    1. Philip Garcia & Steven T. Sonka & Michael A. Mazzacco, 1983. "A Multivariate Logit Analysis of Farmers' Use of Financial Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 136-141.
    2. Streeter, Deborah H, 1992. "Electronic Information Systems and Farmer Decision Making: Five Case Studies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 19(1), pages 97-113.
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    4. Laurence M. Crane & David J. Leatham, 1995. "External equity financing in agriculture via profit and loss sharing contracts: A proposed financial innovation," Agribusiness, John Wiley & Sons, Ltd., vol. 11(3), pages 223-233.
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    Cited by:

    1. Mihaela MOCANU & Aureliana-Geta ROMAN, 2016. "Financial and non-financial reporting in Romanian entities operating in agriculture, forestry, and fishery," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(138), pages 659-659, June.
    2. Josep Maria Argiles Bosch & Josep Garcia Blandon, 2005. "Driver costs in small firms: empirical analysis for farms," Working Papers in Economics 140, Universitat de Barcelona. Espai de Recerca en Economia.
    3. Rute Gonçalves & Patrícia Lopes, 2014. "Accounting in Agriculture: Disclosure practices of listed firms," FEP Working Papers 530, Universidade do Porto, Faculdade de Economia do Porto.
    4. Penttinen, Markku & Latukka, Arto & Merilainen, Harri & Salminen, Olli, 12. "IAS Fair Value and Forest Evaluation on Farm Forestry," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 40, May.
    5. Li Yu (Colly) He & Sue Wright & Elaine Evans, 2018. "Is fair value information relevant to investment decision-making: Evidence from the Australian agricultural sector?," Australian Journal of Management, Australian School of Business, vol. 43(4), pages 555-574, November.

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