ABSTRACT
The literature on biological assets reveals a difficulty in estimating fair value in the absence of an active market, which can reduce the reliability of the accounting information. This scenario of uncertainty was used as a catalyst for the change in CPC 29, focused on bearer plants. However, some biological assets without an active market and with a shorter life cycle are still measured at fair value, using the same valuation models. The objective of this work is to study the models used by sugar mills to measure sugarcane, and to verify whether they are following the standard when accounting for and evidencing sugarcane in their financial statements. It also intends to verify if the assumptions used to calculate the fair value of biological assets are comparable between mills, and if the measurement information is in the explanatory notes. To achieve this objective, the research analyzed 13 financial statements of companies from the sugar and ethanol sector, checking the assumptions used to calculate the fair value. The results indicate that the number of assumptions used in the discounted cash flow models is different among companies, which can compromise the comparability of the information, since there is no uniformity in the number of assumptions disclosed. The three most widely disclosed assumptions are: total recoverable sugar (ATR), estimated production, and discount rate. We conclude that disclosure is low even restricting the analysis to the sugar and ethanol sector, which opens the opportunity for discussion regarding more specific guidelines from the regulator to measure biological assets
Keywords: biological asset; fair value; sugarcane.