The Implementation of Accounting Standards for Coffee Plantation

Finance International program, School of Accounting, BINUS University International

^* Corresponding author: ghifari.fachrezi@yahoo.com

Abstract

Coffee is one of the most prominent agricultural products In Indonesia, besides other commodities such as palm oil, rubber, cocoa, and tea. The International Accounting Standards Board (IASB) regulates the agriculture business in IAS 4. which was issued in December 2000 and prospectively applied worldwide on the 1^st of January 2003. The standard encourages coffee plantations to be recorded at their fair value which leads to many contradictions. In 2014, IASB amended IAS 41 specifically for bearer plants because it is used only for production, and it should be treated similarly to property, plant, and equipment (PPE). The main challenge is versatility. As the growth of the coffee plantation industry in Indonesia increases, accountability has become an important issue to deal with. As there are scarce studies regarding the adoption of accounting standards for coffee plantations in Indonesia, this research is intended to give fresh insights from the business owner’s perspective in the implementation of the related agriculture accounting standards. This research employs a qualitative method with a semi-structured interview and triangulation method. Our findings show that coffee farmers already complied with the PSAK 16 and PSAK 69, even though there are still many challenges that the company faced since the coffee plants are high in versatility and uncertainty.