Implementation of IFRS in statistics
Ultimate Harmonization tool?
Koen Boone
Wye City Group Meeting, Rome, 11th of June 2009
Content
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International Financial Reporting Standards
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Implementation IFRS in Dutch FADN
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Biological assets
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Intangible assets (milk quota)
Conclusion
International Financial Reporting Standard
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International accounting standards for financial
reporting by companies
Adopted by EU to realize EU-27 standardization
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Obliged for all stock listed companies
Strongly advised to other companies (national
regulation)
Applied in more than 100 countries
FASB started process to harmonize with IFRS
Standard (IAS 41) on agriculture
IFRS content – biological assets
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Fair value for biological assets (living)
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Market price
Market price related assets/markets
Benchmarks
Net Present Value
Costs
Change in fair value part of income
Agricultural inventories: fair value or costs (fair
value at point of harvest)
IFRS content - Intangibles
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Valuation if
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Identifiable
Verifiable
Lead to economic profit
When active market: Valuation at fair value and
no depreciation
Example: Milk quota
Dutch FADN
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1500 farms
Data assembled by own employees
Financial, environmental, off farm, people
Part of data in EU-27 database
Complete renewal of system around 2000
Decision to adopt IFRS guidelines
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Harmonization with other sectors
International harmonization
Biological assets in FADN
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Valuation in Dutch (and EU) FADN was already
largely based on current value
Some products still cost of production
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Not traded in its current state (tomato plant)
Very small products
Very volatile products (lettuce)
Fair value/market prices assembled by LEI.
For very differentiated products (flower bulbs):
ask farmer
Change in fair value part of income
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Part of IFRS trend to adopt market values
Much debated
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Product not yet sold (prudence principle)
Users are not used to it or do not understand it
Unreliable and volatile
No relation with performance of farm(er)
Developing countries
Production factors (dairy cow, apple tree) are not sold
in their current state
Biological assets in FADN
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Dutch FADN: Completely implemented
Not much discussion in period 2001-2006
Large price differences in 2007 and 2008
Change in value dairy cows 2007 + 22.000 and in
2008 – 13.000
Debate restarted again for bearers/production
factors
Intangibles – Milk quota
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All milk quota included on balance sheet and no
depreciation
Deferred tax provision (30%)
End of 2008: Abolishment of quota system in
2015
Average value per farm 600.000
Depreciate complete value?
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Increase of value of quota was not included in income
Price of land will increase
Conclusion
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IFRS worldwide standard but adoption not very
fast
IFRS suitable for statistics
Adoption of IFRS in FADN possible but not
without problems
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Limited adoption of business economic accounting in
agriculture
Change in value of bearers
Developing countries
Thank you for your attention
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