ABSTRACT
This chapter focuses on Fair value relevance of biological assets under International Accounting Standard (IAS) 41 in order to enhance knowledge within the realm of agriculture. Some evidence supports the idea that fair value is more reliable in the decision-making process of agents within the realm of agriculture. Value relevance research makes inferences as to how accounting information is reflected in the share prices and influences investors' decision-making. Adding more information into financial statements seems to be the most important advantage of fair value accounting. The chapter explains Fair value relevance of non-financial assets and biological assets. It explores the value relevance of recognised biological assets under the theory of asymmetric information, which assures a strong background for the valuation purpose of financial reporting. The key research issue in the chapter examines the ability of biological assets to explain market equity values.
