Impact of Amendments to IAS 16 and IAS 41 on the Economic-Financial Position of Brazilian Sugar-Energy Companies
DOI:
https://doi.org/10.51341/1984-3925_2021v24n1a6Keywords:
Biological Assets, Bearer Plants, Comparability, Sugarcane.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.
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