● Discussion points

1. IFRS 6 allows companies to continue adopting accounting practices prior to its

issuance. This may raise some problems as some of the costs of the E&E assets
may be capitalised earlier than it would normally be allowed under the conceptual
framework (Picker et al., 2016). Discuss how this can affect the quality of information
presented in the financial statements. Would this affect the decision-making of
external users/investors? Additionally, discuss whether IFRS 6 should stop allowing
companies to continue their existing accounting practices prior to the existence of
IFRS 6.
2. Figuring out when companies can incur or capitalise an expense is also an important
issue in the accounting of E&E assets (Picker et al., 2016). This requires subjective
judgement from the management and hence, leaves room for management to even
engage in earnings management. Discuss the extent to which an accounting
standard can mitigate this issue. Would having a sufficient disclosure be enough for
external users/investors in the case of E&E assets? How can the disclosure
requirements be improved to enhance the quality of the financial statements, what
kind of information would the investors be interested in?
3. The amendment of IAS 41 requires the accounting scope of bearer plants to be
moved into the scope of IAS 16 where it would be measured under the cost model
(Picker et al., 2016). In the case of plants, measuring accurate depreciation may be
hard as there are various uncontrollable factors that would affect the performance of
the plant in producing the harvest such as the weather. Discuss whether the
depreciation method is the best method to reflect the true cost of these plants. What
are other factors that can be considered when depreciating bearer plants? Would
there be a more suitable way to reflect the deteriorating performance of these plants?
4. IAS 41 requires the valuation of assets using the fair value model even when there is
not an active/ready market for these assets (Picker et al., 2016). Discuss the
potential problems that may arise from this. In the case of agricultural assets
accounting that requires specific/specialised knowledge in the industry, how to
ensure that the accounting standards can provide a balance between allowing firm-
specific information to be taken into account in the accounting of such plants, while
maintaining high quality of information, especially in terms of comparability between
firms?

● Newspaper Article
Article: ‘Farms are going to need different kinds of robots
Link: https://www.bbc.com/news/business-56195288

This week’s article is about the technological advancements in the farming industry. Various
technological advancements that have been used in the agricultural industry includes
autonomous harvesting robots, drones that can spray crops, artificial intelligence and even
the use of “big data” (Debusmann Jr, 2021). Having these advancements is especially
crucial in times of the pandemic where our food supply is very vulnerable. Currently,
agricultural businesses have been utilising AI and different softwares, this may have some
impact on the accounting practice for these types of businesses. So, I find this article
relevant because there might be some changes in the accounting practice of agricultural
businesses, especially if many of these businesses have shifted to use more automation,
different AI, and big data in their business practice.
 ● Annual Report
Agromino 2019 Annual Report
Link: https://mb.cision.com/Public/515/3077959/b806549ce46c85a8.pdf

The annual report chosen for this week is from Agromino’s 2019 annual report. Agromino is
a leading Agribusiness manager based in Ukraine and Russia. The company is involved in
various agricultural activities, full farming chain from land operation, crop production and
storage as well as marketing and trading (Agromino, n.d.). I have chosen this annual report
because it shows the adoption of IAS 16 and IAS 41 in a real-life company. From the annual
report, the group classifies their “grassland” asset as bearer plant under the definition of IAS
41. Hence, these grasslands are moved into the scope of IAS 16 where it will be treated as a
property, plant and equipment and measured at cost (less depreciation). Besides that, the
company’s “crops” are treated under the scope of IAS 41, they are measured under fair
value (less cost to sell) (Agromino, 2019).

● Student Paper Feedback

Overall, the flow of the paper is logical and has a clear structure. A suggestion to improve on
the student paper by Dekker and Janis (2021) is to include more elaboration on how the
amendment of the IAS 16 and IAS 41 affects the accounting of bearer plants. For instance,
whether the valuation of bearer plants has improved due to the amendment can be included.
Besides that, the usefulness specifically on bearer plant information for external users can
be explored further.
 Bibliography

Agromino. (n.d.). Retrieved from https://www.agromino.com/about/

Agromino. (2019). Annual Report. Retrieved from

https://mb.cision.com/Public/515/3077959/b806549ce46c85a8.pdf

Jr, B. D. (2021, March 01). 'Farms are going to need different kinds of robots'. Retrieved from

https://www.bbc.com/news/business-56195288

Picker, R., Kerry, C., John, D., David, K., Gilad, L., Janice, L., & Tas, L. V. (2016). Applying

international financial reporting standards. John Wiley & Sons.