Value relevance of the way biological assets contribute to the cash flow of Brazilian agribusiness companies

The study aimed to investigate whether the contribution of biological assets to the cash flow of agribusiness companies is of value relevance to the Brazilian market. To this end, we analyzed the Brazilian companies listed on the B3 that maintain a balance of biological assets in any quarter from 2010 to 2017. To analyze the value relevance it was adopted the model is based on Ohlson (1995), Collins, Maydew and Weiss (1997) and Huffman (2013) based on panel data regression. The results indicate that the biological assets that directly contribute to the cash flows of the companies are more relevant to explain the stock price than those that indirectly contribute. In addition, it was found that biological assets increased their influence on stock prices after the revision of IAS 41, but biological assets that contribute directly did not follow this increase in relevance. This study contributes with insights to the literature on value relevance of biological assets and accounting measurement in relation to the alignment of measurement forms and the contribution to future cash flows of economic resources and business models of companies.