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Company revises fair value methodology for biological assets following FRRP challenge

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28 Feb 2014

The Financial Reporting Council (FRC) has issued a press release of the findings of the Financial Reporting Review Panel (FRRP) stemming from the review of the annual report and accounts of Anglo-Eastern Plantations Plc ("the company").

The principal issue arising from the review, which has led to a prior period restatement, related to the company’s methodology for estimating the fair value of biological assets (palm oil trees) in the balance sheet.

In the specific case under review, the FRRP concluded that:

  • The historical apportionment method applied by the company was not an acceptable approach to calculating a fair value for biological assets, as required by IAS 41 Agriculture.
  • The company’s use of historical rather than current data as inputs to its valuation model resulted in an overstatement of the fair value of the biological assets.

Pease click here for the full press release on the FRC’s website

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