Biological assets reporting: Is the increase in value caused by the biological transformation revenue?

Rural areas represent 91% of the area of 27 European Union (EU) member states and home for more than 56% of their inhabitants as mentioned by the European Commission (2007), which makes the rural development policy very important. Agriculture and forestry have the fundamental importance for the exploitation of farmland and the administration of natural sources in the rural areas of the EU as the platform for the economic diversification of rural areas. Agricultural activity differs from other activities carried out by business units to achieve the profit. Agricultural activity is in comparison with other activities of business subjects dependent on the natural and environmental conditions, and therefore the agriculture specialization is narrowly connected with the geographical position. Another fact, which significantly influences the extent and quality of agricultural production, mainly in the case of plant production, represents the significant dependence on weather conditions and other factors (pests, diseases, etc.), which can be influenced by the action of the human factor only in a restricted extent. As another factor which cannot be influenced, there is considered the biological character of agricultural production – it is necessary to respect the biological characteristics, e.g. the vegetation period, the length of the production cycle, etc., which usually overlap the period of one year. The fact that some products are further consumed by the agricultural enterprise itself could be considered as specific in agricultural production as well. Farm products may be used in the related activities, such as feeding hay and grain to livestock or poultry, or they may be marketed directly by the producer. The narrow connection with farmland which represents a scarce source is considered as a restrictive factor.