Problematic Issues of Accounting for Biological Assets According to International and National Standards

Abstract

Growing economic globalization demands standardized financial reporting which proves especially crucial for the agricultural sector. Companies reporting their finances according to IFRS standards experience better transparency which attracts international capital investment and leads to economic growth. The Uzbek government considers IFRS transition strategic because they support their efforts to implement national policies which establish international accounting compliance. Financial reporting of biological assets comes with specific drawbacks from their natural shifting characteristics and complex valuation processes. Existing research has failed to detail proper methods and organizational procedures when accounting for biological assets during Uzbekistan's implementation of International Financial Reporting Standards. The integration of national standards with international standards requires better comprehensive framework development. This research analyzes the fundamental issues in applying biological asset accounting procedures under international standards besides national requirements by identifying assessment and categorization problems to provide solutions for improved reporting quality. This research reveals multiple identification problems with biological assets alongside difficulties with accurate fair value assessment and inadequate external data availability. A modified accounting standard specifically designed for Uzbekistan’s agriculture sector should be developed by the financial authorities. This research initiates a comprehensive methodology to merge national accounting standards with IFRS 41 specifications about agriculture industries. The implementation of these recommended changes would lead to better financial transparency which will support foreign investments while producing higher economic efficiency through optimal biological assets.