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Sasini Results 2011-12
the deal
#11 Posted : Monday, May 23, 2011 3:09:39 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
What are this biological assets and how are they calculated? unbelievable 50% dividend payout.
mkonomtupu
#12 Posted : Monday, May 23, 2011 3:45:46 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
@deal, biological assets are living plants or animals which are able to produce agricultural produce at the reporting point and which go to the balance sheet as fixed assets/non current assets so a tree is a biological assets and the timber is agricultural produce, a cow is a biological assets the milk is agricultural produce. they are the main factors if you are engaged in agricultural activity. the profit of an agricultural enterprise depends on the management efficiency of these assets.

Calculating biological assets is complicated because unlike the usual company you can't use historical cost so you have to use fair value less cost to sell. Question is how do you value a tea bush or a coffee plant, it could wilt, die of disease etc and how does the auditor confirm those biological assets. that's where the vodoo accounting comes in.

I hope that helps otherwise i failed the exams after i got tired of reading
sparkly
#13 Posted : Monday, May 23, 2011 4:18:09 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
@mkono i agree that the biological assets issue is real voodoo business. I usually look at cashflow statement, cash never lies.
Life is short. Live passionately.
the deal
#14 Posted : Monday, May 23, 2011 10:07:29 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
@mkono thank for schooling me on them biological assets..@sparkly lots of Voodo economics...lol
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