CDQM, An Int. J., Volume 18, Number 3, 2015, pp

CDQM, An Int. J., Volume 18, Number 3, 2015, pp. 24-30 COMMUNICATIONS IN DEPENDABILITY AND QUALITY MANAGEMENT An International Journal UDC 005.52:330.133.1]:631.1 006.83:657.92 COBISS.SR-ID 220842252 Management of Agricultural Enterprises by Means of Fair Financial Reporting in Accordance with International Standards of the Finance and Accounting Reporting Slobodan Popovic 1, Milan Ugirnovic 2 and Stevan Tomasevic 3 1 "PCE "Gradsko Zelenilo" Novi Sad, Sutjeska 2, 21000 Novi Sad, Serbia E-mail: slobodan.popovic49 @ gmail.com 2 Institute for Vegetable Crops, Karadjordjeva 71, 11420 Smederevska Palanka, Serbia 3 Business School of Professional Studies, Vladimira Perića Valtera 4, 21000 Novi Sad, Serbia accepted August 17, 2015 Summary In the process of evaluation, approaches to assess the market position of the company were evaluated, that performs analysis of yield, assets and financial position of the company. Valid assessment may be carried out only by the group of experts. It is important that the group is represented by experts who are familiar with the theory of balance, accounting rules, financial analysis, market experts, experts in the technology being evaluated companies and experts for the evaluation of fixed assets. Within each team performs expert in their discipline and coordination of the work of experts conducted a leader of the assessment team. Appraiser should be regarded as an independent and qualified person for the needs of the customer evaluates the capital that has the customer. Assessors are expected to objectively present the results. Financial reporting enterprise management is carried out continuously. Financial reporting is of utmost importance to only finance management companies. Based on international standards assessment, there is a large degree of flexibility in the choice of assessment methods, and thereby the most important criterion considered the request of the individual case. Key words: Market position company assessment, agricultural equipment, value, financial report. 1. INTRODUCTION Enterprise management over financial reporting includes an important issue, and that is the valuation of the company. In this paper, such a form of governance authors is analyzed by assessing the value and importance of evaluating companies. 24

Objective and independent assessors in relation to the client assumption, are very similar to the auditors for the financial statements of the company. Assessors are expected to objectively present the results. Opinions may not be the result of a compromise and the impact of factors such as the client's wishes or the amount of compensation for assessment is performed. Objectivity must be confirmed by issuing public statements about the independence of appraisers in relation to the company he works for assessment or appraiser must not be co-owner of the company, may not have any financial interest and must not have family connections with business owners. Prescribing mandatory application of fair value for the valuation of the companies, means abandoning previously used historical values. This changes the contents of the financial statements of the financial position as at the reporting date, say some authors [1]. Correct performance of evaluation procedure is essentially the procedures of determining the value and preparation of the report, which follows the assessment itself. The value of the company's equity value. A company can have different values depending on the circumstances and the time is evaluated. In this paper, the basis of assessment of the data over estimates of production and agricultural equipment. Agriculture as a productive economic sector has many similar features as well as other manufacturing industries. Many factors make it more complex. The specifics of these branches should be noted, in order to establish a system of accounting of the business activities of agricultural enterprises. Professional team allows the company to draw up a true and fair financial statements [2]. Market value is defined as the amount of money for which an asset could be exchanged, outdoors and particular market, under normal circumstances and voluntary way in the transaction between the parties, who are well informed about the relevant facts. Appraisal is an expert opinion on the value, as well as the process of determining the value, based on a systematic approach [3]. The use of different methodologies for assessing the value of the company capital, but it should be noted that nowhere is defined as the procedure is performed, or what will all the authorized assessor use in their work to get to the assessment results, which will be expressed in the opinion, which should be submitted to the contracting authority in accordance with contractual obligations. Assessors self-defined procedure that will apply [4]. Valuation of production and agricultural equipment in agriculture, coming more to the fore, especially in times of global economic and financial crisis, which since 2007 in the United States spread to Europe and later to other parts of the world. The economic crisis poses a serious problem to the development of modern society and is manifested by unemployment, debt crisis and other [5]. The financial analysis of companies is applied by the appraiser and includes parsing in order to identify the constituent parts, in this case, parts of companies that have a certain value, and comparison, which aims to establish relations identified between the constituent parts of the company, which make quantitative aspect of the analysis [6]. Financial reporting standards and the application of the fair value require explanations to the level of parts of the company and report [7]. Apart from the strict application of accounting standards is required and market discipline in enterprises to [8], but also increase the reliability of financial statements, applicable law and the protection of assets with which companies have [9]. With the creation of the Great Depression of 2008 most affected by the financial markets and capital, that it has made the area a number of accounting issues concerning financial instruments, and determination of fair value disclosure and recognition of losses due to the reduction in value, 25

off-balance sheet exposures, assessing their credit risks and other issues. Assessment largely depends on the skill, knowledge and skills which govern assessors [10]. The financial statements of companies should be available to external users and provided to certain conditions [11]. Accordingly, the financial statements should be considered in the context of efforts to predict business failure. Precise and reliable method for predicting business failure has not yet been found, the essence of management effort comes down to taking preventive and corrective measures should be viewed in the context of socio-economic activities of the company [12]. The assessment provides a basis for making strategic decisions about the future of the company [13]. An objective presentation is imperative strategic decision-making [14]. Assessment of the value created and certain consequences [15], if such assessment is introduced into the books. In addition to specific valuation [16], this issue at the end of the deal and auditors who give a final evaluation of the performance and the legality of the enterprise [17,18,19]. 2. USED METHODOLOGY The research presented in this paper is here to estimate the value of production and agricultural equipment in use by the International Accounting Standard 16 in company with the predominant agricultural activity. The study was initiated in 2012 in a public utility company in Novi Sad, founded by the City of Novi Sad, which performs the core business of agriculture. The aim of the research is showing initial results on the accounts of plant and equipment, estimates show that virtually made on 30.06.2012. year comparison with the newly adopted concluding observations and data, with possible applications in the future at the level of estimated enterprises, as well as in similar companies on the level of public and public utility system of the City of Novi Sad and beyond. The results have not been introduced in the books, even almost three years later, that is not entered during the writing of this paper, i.e. March 2015, the aforementioned companies. During the preparation of the work we have encountered more problems and open issues. In the first place we can point out a number of different fixed assets of enterprises that have led to the groups and subgroups of accounts, which are supposed to lead to those groups, but on the other. The appraiser has proposed management contracting authority estimates that certain fixed assets in use water as part of other groups, even in some cases the proposed inventory numbers and fixed assets are purchased, but have not led in the Company. In addition, the research we have found out that there is no multi-year valuation of fixed assets in use, which resulted in unrealistic carrying amount of the assets in the accounts of the company. Besides an introduction and a conclusion more work consists of five basic parts. The second section summarizes the company which conducted the research and what kind of basic resources also available. The evaluator has collected basic technical documentation, which served as a basis for further activities valuation of fixed assets in use. Please note, all comments are given in the form of derivative does not suggest short summary, with a great degree of neutrality and no desire to impose a further explanation of the steps that can be implemented within the framework of financial reporting at all levels. The research was carried at fair value in accordance with IAS-16s. The basis of assessment is the expression of the real value of assets and capital in accounting and business books, with the aim of fair reporting in the financial statements of companies with practical application. Valuation date is 30.06.2012. years, and three years after that. March 2015 is still not used to estimate the introduction into the books of the company. 26

3. THE OWNERSHIP STRUCTURE OF FIXED ASSETS WITH THE COMMENT RELATED TO THE ASSESSMENT When making assessments authorized assessor has determined fair value of the property based on the elements that determine the value of the property. The basis for assessing the market value and that all six subject groups estimate. When collecting the relevant data for the preparation of the estimated present value, in particular to take account of market value or values that can be monetarily expressed in nominal terms, which would be subject to assessment could exchange the open and competitive market, under normal circumstances and voluntary way, in a transaction between the parties who are well informed by the relevant facts. The following methods were used: cost method (method of determining actual values), the comparative method (method of comparison sales, direct price comparison) and income capitalization method (method of valuation of income) The estimate is given by the projection of price and value, based on current market conditions and the information available at the time of assessment. Distinguished opinions of employees responsible. It should be noted that the market conditions are subject to large uncertainties influence, and very frequent changes. 4. VALUTION OF FIXED ASSETS IN THE CONTEXT OF WU DIRECTIVES The biggest users of the evaluation report of property of a natural or legal person creditors. They require certified appraisers to use assessment methodology in accordance with the European mortgage market. National Association of Value s of Serbia needs to align its activities with the norms of the EU, with the Directives related to the valuation of the assets, exploit the potential of its members or trained assessors, who meet the criteria proposed that Directive. The EU can be observed integration of the European market mortgage over property, where significant support to lenders, as they mostly use evaluation reports, and are essentially interested in the quality assessment at the highest level. Size mortgage market in EU has great importance for the entire economy by 2008 and the beginning of economic crisis. As the example illustrates the importance of the fact that the outstanding mortgage loans on residential buildings in the 27 Member States accounted for about 50% of the gross national product in the EU. Mortgage market is vital for millions of citizens in the EU, who are paying a mortgage, but also for potential owners of residential buildings. Taking a mortgage is one of the most important financial decisions in a person's life, because financial obligations often lasts for several decades. Trend raising the level of indebtedness of households exist throughout the EU, although it will not necessarily be due to the irresponsibility of giving and taking loans until debt levels are sustainable and can be repaid. In the last twenty years there is a tendency heavier debt servicing by the citizenry, which has led to an increase in the rate of non-fulfillment of financial obligations, but also to an increase in seizures of property, which was subject to a mortgage. Irresponsible lending and borrowing and general economic crisis in all EU countries are two main reasons for the fall of the fulfillment of financial obligations. 27

5. RESEARCH RESULTS SHOW Showing valuation given access to the real and the real big companies in Serbia which deals mainly with agricultural production more than half a century in Novi Sad. Structure by individual representations of equipment from a group of equipment is given in Table 1. It is clearly seen that the value of this group is relatively large and moves almost 8 million. Table 1. Displays the structure of basic groups, showing the assets of the company as of 1/01/2013 Value structure of basic company parts in relation to the total value of the property of the company at disposal Account number Name of the Total value of on which the account of group fixed assets group of fixed of fixed assets denominated assets is [EUR] registered Ordinal number Participation of the group of fixed assets in total assets of the company [%] 1 020000 agricultural land 4.318.496,88 55,01 2 02200 Facilities in 1.184.160,15 15,08 operation 022001 construction 331.064,67 4,22 facilities (subsidies) 3 023000 plants 999.746,77 12,73 (equipment) 023001 plants 1.012.295,77 12,89 (equipment) subsidies 4 026300 works of art, 5.184,21 0,07 sculptural art 5 025500 Other assets 141,15 0,00 Total: 7.851.089,59 100 Proper display of individual evaluations can be seen in Table 2. In the Table 2 presents three equipment individually drawn from Table 1, before and after valuation. The clear conclusion is that before the evaluation of their book value was around 6000 Euros, but after the assessment amounted to 90 thousand Euros. On that basis, clearly perceive the significance of frequent and realistic valuation software companies to obtain fair value of the equipment with which the company has. Therefore it can be concluded that the application of international accounting standards of real importance to the company. By these standards, recommended reassessment in most cases after three years, or less. A shorter period is usually recommended for technically demanding and expensive equipment as well as computers. 6. CONCLUSION Business valuation is a process that results in giving an opinion on the value of an ownership interest in the entity or enterprise on a particular day. Is performed for a certain part of the entity, in relation to the equity of entities in relation to net assets invested capital entity, which in addition to its own may include capital and debt. 28

Table 2. Display of actual results before and after the valuation of randomly selected fixed assets, procurement of different ages for a company Ordinal number Account number on which the group of fixed assets is registered 1 Construction facilities (subsidies) 2 Plants (equipment) subsidies Plants (equipment) subsidies Name of the account of group of fixed assets Greenhouse (1000 m2) Traktor Tomovinković Year built 1997 Ecotraktor 21- communal Year built 1997 The value of selected equipment of a certain group before the evaluation [EUR] The value of selected equipment of a certain group after assessment [EUR] 0 82.651,46 0 1370 5800 6200 Total: 5800 90.221,46 Assessment involves the application of a specific methodology, certain standards and ethical rules in order to convey a particular day of some new value of the part or the whole entity, if the requested by the customer. It can be used when buying or selling a property interest in the company or in the event of a change of capital owners. In addition to basic, there are other situations where the assessment is carried out, for example, when connecting entities or companies, mergers and divisions of companies, calculation of gift tax, property insurance, obtaining loans, recapitalization, resolving disputes before the Commercial Court and other reasons. Evaluation is done in situations when enterprises makes strategic decisions. In the case where the owner and management are in a dilemma whether to keep the existing company with an unchanged activity, whether to sell the company and secondly or bring you the decision to assess the value of the company and this assessment is the basis for making strategic decisions about the future of the company. There are several reasons why companies are doing business valuation. One of the most common reasons for assessing the past ten years is owner shipping transformation of enterprises. Legal solutions entail the enterprises that, prior to making a decision about transformation, assess the value of capital. That applies to all companies, which are disposed to social capital and which is the subject of privatization. REFERENCES [1] Škarić Jovanović, K.: Implikacije primene fer vrednosti na iskazanu moć izveštaja o rezultatu, Savez računovođa i revizora Srbije, Zlatibor, 2012, p. 42 [2] Petkovič, Đ.: Specifičnosti finansijskog izveštavanja u poljoprivrednim preduzećima, Zlatibor, Savez RR Srbije, 2011, p. 314. [3] Đurić, Z.: Metode procene vrednosti nekretnina, Kraljevo, Kvark, 2009, p. 5. 29

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