VALUATION MODEL FOR DAIRY CATTLE

Abstract

Although International Accounting Standard 41 (IAS 41) and draft Thailand Accounting Standard 41 (TAS) have been amended for agricultural business, there still be the problem concerning on reliability of fair valuation of biological assets for the preparation of financial statement. This study aims at constructing econometric model for determining fair value of biological assets for preparing financial statement of the dairy cattle business in Thailand. Individual depth interviews of dairy cattle managers are first conducted to define factors determining milk cow auction price. Experimental survey is then observed using self-reported questionnaire designed based on interview results. Finally, the study applies double-bounded contingent valuation method (CVM) to determine willing to pay for milk cow from experimental survey data by using Panel Logit model. The findings confirm that body condition and age of pregnancy are positively determined willingness to pay for milk cow while age of milk cow has negative impact. These estimated results can easily help determine fair value of milk cow for preparing financial statement.