Original Research

An analysis of the financial reporting compliance of South African public agricultural companies

Ingrid Baigrie, Danie Coetsee
Journal of Economic and Financial Sciences | Vol 9, No 3 | a73 | DOI: https://doi.org/10.4102/jef.v9i3.73 | © 2016 Ingrid Baigrie, Danie Coetsee | This work is licensed under CC Attribution 4.0
Submitted: 18 December 2017 | Published: 03 December 2016

About the author(s)

Ingrid Baigrie, Department of Commercial Accounting, University of Johannesburg, South Africa
Danie Coetsee, Department of Accountancy, University of Johannesburg, South Africa

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Abstract

This article assesses the extent to which South African public companies that are engaged in agricultural activities are complying with the compulsory recognition and measurement and compulsory and voluntary disclosure requirements of IAS 41 Agriculture. Sixteen large South African public companies with material holdings of biological assets in their statements of financial position were selected for analysis. The results of the analysis show that the majority of South African agricultural companies are using fair value to measure their biological assets at initial recognition as well as at the end of each reporting period. Most of these companies are complying with the compulsory disclosure requirements of IAS 41, and are also providing certain of the recommended voluntary disclosures listed in IAS 41. The study concludes that the measurement methods used by companies to value their biological assets and the nature and extent of both compulsory and voluntary disclosures of these assets are sector-specific. This is consistent with previous research findings. This study contributes to the existing literature by providing a baseline on the financial reporting of agricultural entities in South Africa prior to the implementation of IFRS 13.

Keywords

Agriculture; biological assets; compliance; disclosure; fair value

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Crossref Citations

1. Assessing the extent of compliance with IAS 41 by agricultural entities in Southern Malawi
Ndala Nelson
African Journal of Business Management  vol: 12  issue: 19  first page: 586  year: 2018  
doi: 10.5897/AJBM2018.8622