The financial accounting and the cost management in the agricultural activity

The objective of this work is to establish a framework for agricultural activity in terms of financial accounting, that is, the measurement of biological assets and agricultural products, as well as analyse the importance of cost management in the agricultural activity. A qualitative methodology was followed, based on a normative analysis and a literature review of scientific articles on the subject. We found that several authors defend the application of the cost criterion in the measurement of these assets, given the difficulties of calculating fair value in the absence of active markets for certain assets. However, current Portuguese accounting standardization presents fair value (net of selling costs) as a criterion to be applied in the measurement of this type of elements, with cost being a criterion to be applied only exceptionally, in the case of biological assets whose fair value cannot be reliably determinable. Regarding the cost management of agricultural activity, we conclude that, due to the lack of knowledge and / or training and the difficulty of its application, taking into account the risk and uncertainty of this activity, many agricultural managers do not make an adequate management of the costs.