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An Analysis of the Accounting Principles Applied by the European Farm Accountancy Data Network


John Slof


affiliation not provided to SSRN

Josep M. Argilés


Universitat Pompeu Fabra

October 1998

Universitat Pompeu Fabra, Department of Economics and Business Working Paper No. 342

Abstract:     
In spite of its relative importance in the economy of many countries and its growing interrelationships with other sectors, agriculture has traditionally been excluded from accounting standards. Nevertheless, to support its Common Agricultural Policy, for years the European Commission has been making an effort to obtain standardized information on the financial performance and condition of farms. Through the Farm Accountancy Data Network (FADN), every year data are gathered from a rotating sample of 60.000 professional farms across all member states. FADN data collection is not structured as an accounting cycle but as an extensive questionnaire. This questionnaire refers to assets, liabilities, revenues and expenses, and seems to try to obtain a "true and fair view" of the financial performance and condition of the farms it surveys. However, the definitions used in the questionnaire and the way data is aggregated often appear flawed from an accounting perspective. The objective of this paper is to contrast the accounting principles implicit in the FADN questionnaire with generally accepted accounting principles, particularly those found in the IVth Directive of the European Union, on the one hand, and those recently proposed by the International Accounting Standards Committee's Steering Committee on Agriculture in its Draft Statement of Principles, on the other hand. There are two reasons why this is useful. First, it allows to make suggestions how the information provided by FADN could be more in accordance with the accepted accounting framework, and become a more valuable tool for policy makers, farmers, and other stakeholders. Second, it helps assessing the suitability of FADN to become the starting point for a European accounting standard on agriculture.

Number of Pages in PDF File: 16

JEL Classification: M41, M44

working papers series


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Date posted: January 23, 1999  

Suggested Citation

Slof, John and Argilés, Josep M., An Analysis of the Accounting Principles Applied by the European Farm Accountancy Data Network (October 1998). Universitat Pompeu Fabra, Department of Economics and Business Working Paper No. 342. Available at SSRN: http://ssrn.com/abstract=145752 or http://dx.doi.org/10.2139/ssrn.145752

Contact Information

John Slof
affiliation not provided to SSRN ( email )
No Address Available
Josep Maria Argilés Bosch (Contact Author)
Universitat Pompeu Fabra ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34-93 542 24 05 (Phone)
+34-93 542 17 46 (Fax)
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