was defined as ‘an asset with historic, artistic, scientific, technological, geophysical or
environmental qualities that is held and maintained principally for its contribution to
knowledge and culture and this purpose is central to the objectives of the entity holding it’. It
also has been defined by Canadian Institute of Chartered Accountants (1989) as ‘fixed assets
that a government intends to preserve indefinitely because of their unique historical, cultural
or environmental attributes’. In accordant with the auditor-general of NSW, a common
characteristic of heritage assets is that they cannot be replaced. As UK ASB listed some
heritage assets and with the definitions above, examples of heritage assets are national parks,
national monuments, museum and library collections, and historical buildings and sailing
vessels. Therefore, it is hard to restrict access to heritage assets and the assets have limited
ways of use.
Heritage assets are unique. Main difference is that, unlike assets which are
commonly held by private-sector entities, these assets will never generate significant
cashflows in the future. On the contrary, they are likely to decrease future cashflows in
order to ensure they are maintained at their current value to society. Also, their value is
likely to increase over time and as they age, in contrast with most private sector assets (i.e.
depreciation & amortisation). Moreover, by definition, heritage assets do not exist to produce
wealth to individuals who ‘own’ them while typical assets ‘owned’ by entities usually benefit
the holders of the assets. The difficulties related to determining the appropriate measurement
and disclosure of heritage assets would raise another difference with typical assets that are
held by private-sector entities.
Generally a biological asset is defined as ‘a living animal or plant’. The unique
characteristics of biological assets are as follow:
Ÿ Biological assets have a nature of growing and/or procreating capacities that would directly
effect on the value of the asset.
Ÿ As the assets are greatly influenced by environment such as sun, air and wind, the value and
volume of the assets would be increased.
Ÿ Most costs of the assets would be incurred when the time the assets are acquired.
Ÿ Maturity of the assets (life or growing cycle) normally takes longer period of time than
Ÿ Actual expenses for the assets would not respond exactly to the amount. Outcome would
vary depending on the natural circumstances, flooding or droughts for instance.
Roberts, Staunton and Hagen (1995) propose current market value of livestock
should be applied to evaluate biological assets for financial reporting purpose. Moreover,
they insist that only those changes in value because of volume changes need to be treated as
Their recommendations are based on the statement of Roberts (1988) quote: ‘Within
the spirit of the principles of current-cost accounting it is reasonable, true and fair to have the
livestock inventory shown in balance sheet at net realisable value provided that the basis is
stated and that it is verifiable. Such a value is also meaningful and acceptable for expectations
of ratios such as returns on capital employed. It is however, in the area of accounting for
profit that dissensions occur. This is particularly so where breeding, and thus the problems
associated with animated plant and the retention of productive capacity, arises’.
AASB 141, however, does not include or support RSH’s suggestions stating that ‘a
gain or loss arising on initial recognition of a biological asset at fair value less estimated
point-of-sale costs and from a change in fair value less estimated point-of-sale costs of a
biological asset shall be included in profit or loss for the...