Examining the Accounting Practice for Biological Assets among Malaysian Listed Companies: The Case of Aquaculture

Abstract

The aquaculture sector has been recognized as a crucial and high-priority area in Malaysia's economic development. The study's goal is to investigate the accounting practices used by Malaysian aquaculture-listed firms. As samples, two listed aquaculture enterprises were chosen. The accounting processes of the listed aquaculture companies were examined using content analysis. By looking at how the aquaculture business was covered in the annual reports of these chosen companies, the study's goal was achieved. The study specifically looked at the listed businesses' accounting processes for aquaculture definition, recognition, measurement, presentation, and disclosure. The major conclusions showed that the two companies accounting practices in terms of biological asset-aquaculture definition, recognition, measurement, presentation, and disclosure comply with the standards of MFRS 141 Agriculture. The findings of this study added to our understanding of agricultural accounting. The findings will offer new aquaculture-listed firms accounting best practices guidelines. The findings are also anticipated to help Malaysian businesses embrace MFRS 141 by improving the regulatory environment.

Examining The Value Relevance of Biological Assets and Their Fair Value Change in Malaysia

“…When calculating the amount of fresh palm oil and durian that will be produced, the company takes into account the expected yield of the biological assets. This yield is determined by the age of the oil palm and durian trees, as well as the location, soil type, and infrastructure (Norizan and Kadri, 2022a). The market price of fish of equivalent length, species, and genetic quality is used by aquaculture businesses to estimate the fair value less selling costs of fishery livestock, minus the predicted mortality of fishery livestock, and selling costs.…”

“…The market price of fish of equivalent length, species, and genetic quality is used by aquaculture businesses to estimate the fair value less selling costs of fishery livestock, minus the predicted mortality of fishery livestock, and selling costs. This is done by subtracting the predicted mortality from the market price of fish (Norizan et al, 2022b). Thurrun Bhakir (2010) discovered that out of 43 oil palm plantations listed on Bursa Malaysia analysed, only ten percent of the companies adopt the fair value method.…”

“…The determination of fair value can be challenging and even complex, particularly when dealing with biological assets or agricultural produce, both of which have a potential propensity to be undervalued due to shortcuts being taken. For instance, according to Norizan and Kadri (2022a), the selection of fair value methodologies is the primary concern for plantation firms in Malaysia. Due to the fact that it is relatively difficult to ascertain, the vast majority of companies are not yet in a position to implement this strategy.…”

The Guidelines for Developing Competitiveness of Thai Agricultural Products: A Case Study of Durian Production in 14 Southern Provinces, Thailand

“…The three selected durian producer-listed firms defined, recognised, measured, presented, and declared the growing agricultural producedurian fruits and durian treesin compliance with Malaysian Financial Reporting Standards, Plant and Equipment, respectively. The financial statements and notes to financial statements must recognise, measure, present, and disclose agricultural output and bearer plants and classify biological assets as current or non-current assets [17].…”