Impact of Fair Value Accounting on Biological Assets in Agricultural Sector in Nigeria
International Journal of Finance and Banking Research
Volume 5, Issue 4, August 2019, Pages: 64-70
Received: May 30, 2019; Accepted: Jul. 17, 2019; Published: Aug. 5, 2019
Views 385      Downloads 107
Ubesie Madubuko Cyril, Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria
Nnajieze Ifeyinwa Elizabeth, Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria
Mbah Chris Chukwuemeka, Department of Marketing, Faculty of Management Sciences, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria
Article Tools
Follow on us
This study critically reviewed the impact of fair value accounting on biological assets of Nigerian agricultural sector with a focus on Okomu Oil Palm Company Plcfor the period of 2009-2018. The study adopted ex-post facto research design. Analytical techniques employed were descriptive statistics and Ordinary Least Squares (OLS) multiple regression analysis. Findings revealed that fair value accounting operationalized by non-current asset, profit after tax, and current assets have insignificant positive effect on the biological assets of the Nigerian Agricultural firms. The implication is that the company reports gain in their biological assets when the fair values of their assets increases. Based on these findings, it was recommended among others that there is need for agricultural firms to adopt the fair value accounting system in other to keep proper records of its biological assets.
Fair Value, Biological Assets, Ordinary Least Squares Regression, Agricultural Sector
To cite this article
Ubesie Madubuko Cyril, Nnajieze Ifeyinwa Elizabeth, Mbah Chris Chukwuemeka, Impact of Fair Value Accounting on Biological Assets in Agricultural Sector in Nigeria, International Journal of Finance and Banking Research. Vol. 5, No. 4, 2019, pp. 64-70. doi: 10.11648/j.ijfbr.20190504.11
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Herbohn, K. &Herbohn, J. (2006). International Accounting Standard (IAS) 41: What are the implications for reporting forest assets? Small-scale Forest Economics, Management and Policy, 5 (2), 175-189.
Gonçalves, R. & Lopes, P. (2014). Accounting in agriculture: Disclosure practices of listed firms. FEP Working Paper No. 530, 1-31.
Ryan, S. G. (2008). Fair value accounting: Understanding the issues raised by the credit crunch. Council of Institutional Investors, 1-24.
IFRS (2009). A practical guide to accounting for agricultural assets November. Price Water House Coopers Retrieved on March 27 2019 from
Sanja, S. M., Ivana, M. S. &Mateja, B. (2016). Valuation of biological assets under IAS 41 – the case of listed and large companies in Croatia. Research World International Conference, Barcelona, Spain, 44-50.
Amanamah, R. & Owusu, E. K. (2016). Perception on fair value measurement in Ghana: Evidence from account personnel. African Journal of Applied Research (AJAR), 2 (2), 22-34.
Ashford, C. C. (2011). Fair value accounting: Its impacts on financial reporting and how it can be enhanced to provide more clarity and reliability of information for users of financial statements. International Journal of Business and Social Science, 2 (20), 12-19.
Quagli, A. & Avallone, F. (2010). Fair value or cost model? Drivers of choice for IAS 40 in the real estate industry. European Accounting Review, 19 (3), 461-493.
Agyemang, J. K., Acheampong, O. & Akenten, W. N. (2018). Fair value accounting: Implementation challenges facing small and medium-sized entities in the agricultural sector. International Journal of Accounting and Financial Reporting, 8 (4), 1-23.
IASB, International Accounting Standard 41 – Agriculture, EC staff consolidated version as of 16 September 2009. Retrieved from: on April 15, 2019.
Bessong, P. K. & Charles, E. (2012). Comparative analysis of fair value and historical cost accounting on reported Profit: A study of selected manufacturing companies in Nigeria. Research Journal of Finance and Accounting, 3 (8), 132-149.
Cavalheiro, R. T., Kremer, A. M. & Gimenes, R. M. T. (2017). Fair value for biological assets: an empirical approach. Mediterranean Journal of Social Sciences, 8 (3), 55-68.
Starova, M., Cermakova, H., Hlavsa, T., Vostrovska, M. & Leva, M. (2016). Evaluation of applicability of IAS 41 – Agriculture to the valuation of growing forest stands and their accounting treatment in the Czech Republic. Journal of Forest Science, 62 (9), 429-440.
Dorel, M., Veronica, G., Elena, H., Ionel, B., Ovidiu, B., Aura, D., Maria, M. &Alin, A. (2015). Biological assets and the agricultural products in the context of the implementation of the IAS 41: A case study of the Romanian agro-food system. Arch. Biol. Sci., Belgrade, 67 (2), 705-714.
Biljon, M. V. (2016). An application guideline for the fair value accounting of biological assets. University of South Africa, 1-315.
Balogun, E. O. (2015). Effect of fair value accounting on asset valuation in Public Limited Companies (A Study of Petroleum Companies in Nigeria). Journal of Accounting and Financial Management, 1 (8), 111-126.
Kazmouz, B. (2010). The Effect of Applying Fair Value on the Financial Statements of UK Leading Companies. An M.Sc. Dissertation, Department of Accounting and Finance; Arab British Academy for Higher Education.
Alaryan, L. A., Haija, A. A. A. & Ali, M. A. (2014). The relationship between fair value accounting and presence of manipulation in financial statements. International Journal of Accounting and Financial Reporting, 4 (1), 221-237.
Al-Khadash, H. A. & Khasawney, A. Y. (2014). The effect of the fair value option under IAS 40 on the volatility of earnings. Journal of Applied Finance & Banking, 4 (5), 95-113.
Elfaki, A. A. A. & Hammad, S. M. E. (2015). The impact of the application of fair value accounting on the quality of accounting information: An empirical study on a group of companies listed on the Khartoum Stock Exchange. International Journal of Academic Research in Accounting, Finance and Management Sciences, 5 (1), 148-160.
SaadAl-Sakini andHanan Al-Awawdeh (2015). The Effect of Accounting Conservatism and its Impact on the Fair Value of the Corporation: Empirical Study on Jordanian Public Joint-Stock Industrial Companies. International Journal of Business and Social Science, 6 (7), 2015.
Gujarati D. N. and Porter, D. C. (2009). Basic Econometrics. 5th Edition, McGraw-Hill/Irwin, Boston, 400.
International Accounting Standards Board (IASB). 2014a. Technical summary: IAS 41 Agriculture [online]. United Kingdom. Retrieved from: on April 13, 2019.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186