Impact of Amendments to IAS 16 and IAS 41 on the Economic-Financial Position of Brazilian Sugar-Energy Companies

Marcos Paulo Rodrigues de Souza, Pery Francisco Assis Shikida

Abstract


Objective: To identify the impact of the amendments to IAS 16 and IAS 41 on the economic and financial position of Brazilian sugar-energy companies, in the transition period from 2015 to 2017.

Method: In a sample of 64 companies, the inverse of the Gray Comparability index was used to measure the impact and the paired Wilcoxon test to identify the significance.

Originality/Relevance: This new accounting policy divided the plant and production into two assets with different measurement models. In the process of accounting for sugarcane crops, the sugarcane ratoon, considered a bearer plant, is now measured at historical cost and classified as fixed assets while standing cane continues to be measured by fair value but reported in current assets.

Results: Retrospective accounting adjustments significantly impacted most of the variables analyzed. They improved current liquidity and asset turnover and negatively impacted third-party capital participation, fixed assets, general liquidity, and return on equity. The debt composition, quick liquidity, net margin, return on investments, and the operating cycle remained relatively stable.

Theoretical/Methodological contributions: The study shows that the amendments to IAS 16 and IAS 41 imply the loss of comparability of accounting numbers and economic-financial indicators concerning previous periods. Besides, considering the peculiarities of sugarcane crops, the study provides evidence that contributes to discussions on measuring the fair value of standing cane.


Keywords


Biological Assets; Bearer Plants; Comparability; Sugarcane.

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References


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DOI: http://dx.doi.org/10.51341/1984-3925_2021v24n1a6

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