ABSTRACT

IFRS is increasingly required in developing economies. Among these countries, agriculture is typically a key component of the economy. This study investigates how the International Financial Reporting Standard (IFRS) on agriculture, International Accounting Standard (IAS) 41, is applied to the primary agricultural produce in the rubber industry, latex. The scope of the study was limited to rubber producers that also conduct post-harvest processing in a developing economy, Cambodia. Cambodia is a country in Southeast Asia that requires compliance with either International Financial Reporting Standards (IFRS) or IFRS for SMEs. For this study, accounting practices were learned through interviews and phone surveys with accountants, finance directors and other representatives of 45 rubber producers in Cambodia. It was found that despite legal requirements to apply either IFRS or IFRS for SMEs, none of the Cambodian industrial rubber producers with processing facilities complied with either set of standards. Instead, Cambodian rubber producers continue to account for their agricultural produce, latex, at historical cost. This paper begins with an overview of the rubber industry in Cambodia and the accounting regulatory framework that applies in Cambodia. Next, the requirements of IAS 41 Agriculture as applied to latex harvest are reviewed. Following this, the findings are briefly discussed. This paper ends with a review of how the rubber producers might present agricultural produce the fair value gains and losses related to agricultural produce in their financial statements in accordance with IFRS