ABSTRACT This paper starts out to a

ABSTRACT
This paper starts out to analyse the recent debate about the convenience of the move of
accounting from historical cost toward the fair-value principle. In spite that there is no
unanimous opinion on the advantages and drawbacks of its implementation with respect
to historic cost, in the existing previous literature. on agricultural accounting prevails a
claim against the requirement of IAS 41 of fair valuation for biological assets.
This research provided empirical evidence that the use of fair value principle for
biological assets provides significant different valuations of assets and revenues with
respect to historic cost, but does neither disclose significant differences in profits, nor
increase volatility, nor bring about different profitability and accounting manipulation.
Provided that historic cost is a complex valuation method for biological assets, it seems
that fair value is an interesting tool for the predominant small holdings in the
agricultural sector in the European Union.
Keywords: agricultural accounting, fair value, historic cost, biological assets.