SIPEF: Biological Assets at Fair Value Under IAS 41

Posted: 12 Apr 2012

See all articles by Eddie Riedl

Eddie Riedl

Boston University - Questrom School of Business

Kristin Elaine Meyer

Harvard Business School

Date Written: November 9, 2010

Abstract

This case examines fair value accounting under lAS 41 for a European-listed agricultural firm. Students identify the firm's core operations, distinguishing the IFRS treatment for three distinct assets: land; agricultural assets that reside on the land; and inventory harvested from the land. They also analyze key reporting decisions relating to the agricultural assets, which create frictions such that market value and book value do not converge despite the application of fair value for the majority of the firm's assets. The case also highlights how fair value accounting affects key valuation inputs such as earnings, and the implications for abnormal-earnings based valuation.

Learning Objective: For MBA, Exec Ed.

Suggested Citation

Riedl, Edward J. and Meyer, Kristin Elaine, SIPEF: Biological Assets at Fair Value Under IAS 41 (November 9, 2010). Harvard Business School Accounting & Management Unit Case No. 110-026. Available at SSRN: https://ssrn.com/abstract=2038354

Edward J. Riedl (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617-353-2317 (Phone)

Kristin Elaine Meyer

Harvard Business School ( email )

Soldiers Field Road
Morgan 365
Boston, MA 02163
United States

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