Valuation of biological assets and reasonableness of financial information: a systematic review of empirical evidence in the agricultural sector

The valuation of biological assets is crucial for the preparation of financial information in the agricultural sector, especially given the uniqueness of these assets such as livestock and crops. This study focuses on the relationship between the measurement of these assets under the International Accounting Standard (IAS) 41 and the reasonableness of the financial information generated. Through a systematic literature review, various valuation methods, such as fair value, discounted cash flow, and historical cost, are examined and their implications on the quality of financial information and strategic decision-making in agricultural enterprises are analyzed. The results indicate that while fair value provides greater transparency, its application in volatile markets can generate uncertainty, whereas historical cost, although more stable, may not adequately reflect changes in the value of biological assets. Furthermore, the review highlights the importance of transparency and proper disclosure of information regarding these assets, which enhances investor confidence and facilitates decision-making. Finally, the study emphasizes the need to adapt measurement methods to the specific characteristics of the agricultural sector to improve the accuracy of financial information and its usefulness in business decision-making.