Economics Working Papers 2018, 2(1):7-52 | DOI: 10.32725/ewp.2018.001357

Financial health assesment from the accounting perspective in the case of agriculture

Nývltová Kristýna

Agriculture is a very specific field. These specifics cannot be entirely covered by accounting legislation Due to this fact, some accounting items or information that are included in the financial statements may be affected and thus can be also the assessing the financial health of an enterprise affected. The main objectives of the paper are to determine problematic accounting areas in agriculture arising both from the specifics of the given field and the legislative solution of some accounting cases and to assess their impact on the financial statements. The analysis of problematic areas is followed by the application, which evaluates the impact of these areas on the values of selected entries recorded in the financial statements. For the analysis, 163 data records of 64 Czech small and medium agricultural companies was available. To achieve this analysis a paired t-test was used, including analysis of normal distribution assumptions. By using pair t-test, differences in accounting solutions of problematic areas, namely investment subsidies, the lease for the tenant, valuation of the land and the old and new accounting solution of changes in stocks were demonstrated. In all analysis, there is statistically significant difference between currently used method and the proposed method of accounting solution of problematic areas. Despite the statistically significant difference, the total difference of the values of the available data is small. The reason can be the testing of small and medium-sized businesses. The aim is to include large companies as well in the following analysis.

Keywords: accounting, agriculture, financial health assessment, accounting legislation, specifics of business field

JEL classification: G3, M4, Q1

Received: July 25, 2018; Revised: July 25, 2018; Published: July 25, 2018  Show citation