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MANY AUSTRALIAN ACCOUNTING standards are not applicable to many self-generating and regenerating assets (SGARAs). There is also divergence in the financial reporting of SGARAs among SGARA-related entities. These are two of the findings of Discussion Paper No 23 'Accounting for Self-generating and Regenerating Assets' (DP 23) published by the Australian Accounting Research Foundation (AARF).
To overcome the resulting problem of non-comparable financial reporting, the authors of the discussion paper, Don Roberts, John Staunton and Laurence Hagan, recommend that an accounting standard be developed which provides guidance on the accounting for SGARAs.
DP 23 considers accounting for SGARAs in the context of the Conceptual Framework. In particular, the paper considers the following issues:
* the unique nature of SGARAs and therefore the need for special attention to be given to them in financial reporting;
* the classification and presentation of SGARAs recognised in financial reports;
* the measurement of SGARAs in the statement of financial position;
* the recognition and measurement of revenue; and
* other SGARA-related issues such as disclosure of non-financial information and biotechnology.
In discussing these issues, the main focus of the paper is on the forestry and livestock industries. Other SGARA-related industries (such as agriculture, orchards and viticulture are considered briefly.
The...