BIOLOGICAL ASSETS OF ORGANIC PRODUCTION IN THE SYSTEM OF ACCOUNTING CATEGORIES AND CONCEPTS

Abstract

The present article is dedicated to the pertinent issue of accounting for biological assets in the context of organic production. A critical analysis of extant theoretical approaches to the definition, recognition and valuation of biological assets has been conducted. The research revealed the absence of a proper accounting system for organic production objects, particularly biological assets, both in Ukraine and in international accounting practice. The primary issue identified pertains to the inconsistency of terminology and the definitions of categories employed in accounting, along with their ambiguous interpretation in regulatory acts. The purpose of the present article is to define key terms for the accounting of biological assets, taking into account the specifics of organic agricultural production. The object of research is land and biological assets of organic production. The subject of the study is the theoretical, methodological and practical aspects of accounting for biological assets in organic production. The following methodological approaches were utilised in the study: theoretical analysis (for systematisation of literary and regulatory sources), comparative analysis (for identifying discrepancies and comparing methodologies), systems approach (for identifying biological assets in the accounting system), and generalisation method (for drawing conclusions and defining terminology). An analysis has been conducted of the state and trends of organic production development on a global, European, and Ukrainian scale. It has been established that the positive impact of organic production on the ecosystem is not taken into account by traditional accounting methods. The foundation of the agroecosystem is agricultural land, which is a strategic resource for Ukraine and an indispensable tool for agricultural producers. The specific characteristics of this asset include biological processes and transformations that occur with it and affect its fertility, as well as the absence of a defined useful life and depreciation. Agricultural land constitutes an element of natural capital with the capacity for biological assimilation. The article under discussion herein justifies the necessity to integrate agricultural land into the category of biological assets. The integration of agricultural land into the category of biological assets will facilitate the development of a comprehensive methodology for assessing this type of asset, considering both economic and environmental aspects, including its positive impact on the agroecosystem and the environment. The main results of the study: in order to ensure a unified approach to accounting in organic production, the necessity of developing a separate accounting standard is substantiated. The authors' own definition of the category “biological assets of organic production” is proposed, which takes into account both economic and environmental aspects. The criteria for recognising biological assets of organic production in accounting are determined.