A Fair Value Model for Bearer Biological Assets in Promoting Corporate Governance: A Proposal

Abstract

This paper discusses IAS 41 Agriculture with specific focus on accounting for bearer biological assets in Malaysia. It presents the concerns raised by various parties on the applicability of IAS 41 on bearer biological assets particularly on the use of present value of future net cash flows model to determine the fair value of certain category of biological assets. This paper posits that there is a way to develop a fair value model through identifying factors that influence the fair value of bearer biological assets. The results of the proposed study would hopefully assist in the development of an alternative fair value model in valuing bearer biological assets and subsequently lead to good corporate governance specifically on the improving the qualitative characteristic of financial information.