Agricultural accounting in times of pandemic

Written by: Diomer Antonio Galán Rincón.

Bachelor's Degree. Public Accounting / MSc. Science of Higher Education.

The globalization of the economy, finance and technological and scientific change have developed an unprecedented discipline in the science of accounting in Venezuela. It has gone from an accounting based on the rendering of accounts, bookkeeping, presentation of the financial information of the companies and the regulation of the legal-tax aspects to a new accounting model framed in the adaptation of the country to the new International Accounting Standards (IAS), for SMEs and Large Companies, as well as to an endless number of specific universal terms that have become part of the vocabulary of the professional accountant.

Within this new approach is the international accounting standard (IAS 41 Agriculture), which deals with the recording of biological assets from the point of view of the fair value of the product, from the time of its initial recognition through its harvesting or collection, to the date of each balance sheet or financial statement at its market value, taking into account the estimated costs of production up to the point of sale.

In addition to this, the public accountant has had to learn to develop both the techniques and the appropriate procedures to qualify, reveal costs, value inventories and determine their profitability, but as a result of the pandemic, companies in the sector have been suffering a series of difficulties to acquire agricultural inputs and products that serve to improve the soil and agricultural production, due to the country's economic recession and the political problems of the country.

This is why companies have suffered an important variation in their financial statements and therefore in their invested capital stock, since if we take as a reference the financial situation since the pandemic began to today, their biological assets such as crops and sowings do not represent the same productivity or performance in the rotation of their inventories, resulting in the loss of financial capital and the closure of some companies engaged in agriculture, also leaving some accountants unemployed.

For this reason, the recommendation that arises to these companies is to boost or change their economic activity, bearing in mind that the pandemic affects all existing companies, whether large or small.

For all these reasons, we can conclude that agricultural accounting in times of pandemic does not foresee an improvement in the short term, since if there is no financial leverage from the State or international agreements, agricultural companies will not be able to survive.

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