Accounting Standards Board Seeks Input on “ Agriculture ”
NOTES & NEWS
Accounting Standards Board Seeks Input on “ Agriculture ”
In December 2015 , the Accounting Standards Board ( AcSB ) issued a discussion paper 1 to address the diversity of methods used by private enterprises to account for biological assets . These assets include living animals and plants , as well as agricultural produce , such as the harvested product of an enterprise ’ s biological assets . 2 The discussion paper , entitled “ Agriculture ,” outlines a variety of issues that are causing difficulties for stakeholders in the agricultural sector — chief among them , the diversity in accounting . The AcSB is seeking to address many of these issues , including :
• When a biological asset should be recognized , how it should be measured on initial recognition , and how it should be measured in subsequent periods ;
• How agricultural produce should be accounted for ; and
• What disclosures should be required .
According to Statistics Canada data from 2011 , the agricultural sector has over 200,000 farm businesses , which account for 8 %, or $ 101.1 billion , of Canada ’ s GDP . 3 To reach out to some of these businesses , the AcSB set up 14 roundtable meetings across Canada , including two in BC ; the first of these two meetings was held in Kelowna on July 28 , and the second will be held in Abbotsford on October 5 . Linda Mezon , FCPA , FCA , chair of the AcSB , and Paul Hargreaves , CPA , CMA , a BC member serving on the AcSB , led the meeting in Kelowna . The session was attended by 20 CPABC members , including preparers , service providers , and lenders , who shared their opinions on the various accounting issues faced by those working in the agricultural sector .
Their input will assist the AcSB in deciding whether to develop authoritative guidance on accounting for biological assets and agricultural produce by private enterprises — whether by developing a new standard or by amending existing standards . To stay current on developments in this multi-year project , or to read comment letters that have been submitted to the AcSB , visit the Financial Reporting & Assurance Standards Canada website at frascanada . ca / index . aspx . And if you would like to participate in the roundtable session being held in Abbotsford on October 5 , contact David Chiang , CPA , CA , CPABC ’ s VP of member services , at dchiang @ bccpa . ca .
1
A discussion paper is one of the early steps in the development of new accounting standards . Its purpose is to obtain broad input from stakeholders — particularly those most affected by the standards in question — and it may lead to exposure drafts , consultations , and re-exposures before ultimately leading to an amendment or a new standard .
2
At this stage , the project scope excludes purchased agricultural produce ( which is covered under CPA Canada Handbook Section 3031 : Inventories ), as well as government grants , land , and quotas .
3 statcan . gc . ca / pub / 11-402-x / 2011000 / chap / ag / ag-eng . htm . 2011 data was the latest data available from Statistics Canada at the time of the development of the discussion paper . Note that these figures include business activity conducted by both public and private enterprises ; however , the AcSB understands that the vast majority of agricultural enterprises in Canada are privately held .
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12 CPABC in Focus • Sept / Oct 2016