Cost-Based Valuation of Biological Assets
Explore how cost-based valuation supports reliable financial reporting of biological assets, ensuring compliance with IAS 16, IAS 41, and local GAAP.
Why It Matters
Market Adaptability
For companies managing forests, livestock, or crops, our approach provides flexibility when active markets are unavailable.
Compliance & Transparency
Cost-based valuation ensures practical and compliant reporting while maintaining complete transparency in financial statements.
Risk Management
Our methodology helps manage risk while ensuring alignment with international standards and best practices.
Common Challenges
Historical Cost Tracing
Difficulty in tracing historical costs of long-term biological cycles.
Value Adjustment
Adjusting for depreciation, maintenance, and transformation over time.
Compliance Balance
Balancing between cost records and fair value disclosure requirements.
How It Works
Historical Costs
01Original purchase or cultivation expenses tracked systematically over time.
Depreciation
02Systematic allocation of costs over the asset's estimated useful life period.
Impairment
03Regular testing to ensure carrying amounts don't exceed recoverable value.
Enhancements
04Value additions through maintenance and improvement programs.
Strategic Advantages
Compliance
Aligned with IAS 16 for property, plant & equipment and IAS 41 for agriculture. Ensures adherence to international standards and reporting requirements.
Clarity
Clear traceability for auditors and regulators. Provides transparent documentation and reporting processes for all stakeholders.
Risk Management
Avoids overvaluation during market volatility. Implements robust risk assessment and mitigation strategies for long-term stability.
Decision Support
Offers consistent baseline for CAPEX planning. Enables data-driven decision making for strategic investments and resource allocation.
Beyond Compliance
Internal Controls
Strengthen organizational oversight with robust control mechanisms and systematic monitoring procedures.
Governance Excellence
Enhance corporate governance through transparent reporting and accountable management practices.
Strategic Investment
Make informed investment decisions based on reliable data and comprehensive valuation analysis.
Cost-based valuation is not just an accounting rule — it also enables organizations to build internal controls, improve governance, and design investment strategies grounded in reliable data.
