Spanish and Western agriculture show a continuous decrease in the number
of farms. One of the main factors for this trend is the economic
non-viability of many of the existing farms. In addition, interrelationship
of agriculture with other industries is growing. Thus, policymakers, banks,
creditors and other stakeholders are interested in predicting farm viability.
The aim of this paper is to provide empirical evidence that the use of
accounting-based information could significantly improve understanding
and ...
Spanish and Western agriculture show a continuous decrease in the number
of farms. One of the main factors for this trend is the economic
non-viability of many of the existing farms. In addition, interrelationship
of agriculture with other industries is growing. Thus, policymakers, banks,
creditors and other stakeholders are interested in predicting farm viability.
The aim of this paper is to provide empirical evidence that the use of
accounting-based information could significantly improve understanding
and prediction of various degrees of farm viability. Two multinomial logit
models were applied to a sample of farms of Catalonia, Spain. One model
included non-accounting-based variables, while the other also considered
accounting-based variables. It was found that accounting added significant
information to predict various degrees of farm viability. This finding
reveals, both the need of encouraging the little existing use of accounting
by farms and to develop appropriate accounting standards for agriculture.
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