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A comparative study of difficulties in accounting preparation and judgement in agriculture using fair value and historical cost accounting for biological assets valuation

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This paper presents empirical research comparing the accounting difficulties that arise from the use of two valuation methods for biological assets, fair value (FV) and historical cost (HC) accounting, in the agricultural sector. It also compares how reliable each valuation method is in the decision-making process of agents within the sector. By conducting an experiment with students, farmers, and accountants operating in the agricultural sector, we find that they have more difficulties, make larger miscalculations and make poorer judgements with HC accounting than with FV accounting. In-depth interviews uncover flawed accounting practices in the agricultural sector in Spain in order to meet HC accounting requirements. Given the complexities of cost calculation for biological assets and the predominance of small family business units in advanced Western countries, the study concludes that accounting can be more easily applied in the agricultural sector under FV than HC accounting, and that HC conveys a less accurate grasp of the real situation of a farm.

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ARGILÉS BOSCH, Josep m., SABATA I ALIBERCH, Anna, GARCÍA BLANDÓN, Josep. A comparative study of difficulties in accounting preparation and judgement in agriculture using fair value and historical cost accounting for biological assets valuation. _Revista de Contabilidad_. 2012. Vol. 15, núm. 1, pàgs. 109-142. [consulta: 25 de febrer de 2026]. ISSN: 1138-4891. [Disponible a: https://hdl.handle.net/2445/62988]

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