Accounting Theory Bio Sustainable Feeds

Question: Describe about the Accounting Theory for Bio Sustainable Feeds. Answer: Introduction Bio sustainable Feeds (BSF) Limited is an Australian based company. The company's operation is engaged in the research of sustainable feed products from the last two decades. The company is researching on the feed that is based on the plants and aqua cultural products. It is a bio based industry and thereby invests huge amount of money in the research and development program. The bio research program conducted by the company helps to improve the sustainability of the product. Therefore, it increases value of the company's product and thereby has a positive value towards the society. The company is engaged in the research of various plants and aqua culture feeds. Discussion Nature and value to society of the research being done by BSF Ltd. In the last two decades, Bio Sustainable Feeds (BSF) Limited is engaged in the sustainable bio research programmes. It conducted a research on the products which are plant based feed including corn, sunflower, canola and other related products. The research creates a high value towards the society as it enhances the quality of the product and thus contributes to the development of bio based industries. With the research program, limited production of natural resources is enhanced and thereby the process of biological or natural resources helps in satisfying the consumer's demand at a large. It ensures social and economic benefit to the society through assessing the safety of food products. The consumption of food significantly affects the health of the human beings. It manages to maintain the sustainability of fish based feed and plant based feed (Biomar, 2016). The research conducted by BSF Ltd. entails the concerned issue of natural resources as bio based products. Several uncommon facts have been disclosed through the research of BSF Ltd. and thereby it signifies the understanding of the challenges which are sustainable in nature. The assessment of challenges and issues has been generated while BSF Ltd. is conducting its research. Hence, the research done by the company uses sustainable resources which in turn grows the society's value and therefore, it also adds value to the bio based products. It has promoted the sustainability of bio energy in the economy. With the systematic analysis of the research conducted by the company, environmental and human related issues have been resolved with the rise in its cost (Europa, 2016). Problems with the early researches done by BSF Ltd. There were several issues in the earlier researches done by Bio Sustainable Feeds (BSF) Ltd. The plant based feed research conducted by the company has cost of AUD $ 360 million but, it fails to prosper any significant result. It was also observed that the rate of conversion was not much effective because the plant based fish feed was expected to determine the issues related to the fish based feed which can be easily converted from the value of lower rate to higher rate feed products. But, the rate measured by the company was not actual as expected from the research. These issues are complex in nature and thereby charge of allegation was raised by many environmentalists at the earlier research. According to these environmentalists, food crops create diversion among poor and luxurious food items (europa, 2011). However, the lower value of fish feeds in production benefits the rich people but it also leads to risk for poor people. These risks are related to starvation and even malnutri tion to the poor people. Further, in response to these challenges and issues, Bio Sustainable Feeds (BSF) Ltd. has stated researching about the concept where bacteria can generate fish feeds from the residue of sugar cane, wood chips or the methane gas. The company has taken various measures to minimize their cost and thus develop effective research on plant based and aquaculture feeds. The manufacturer of the fish feeds are not allowed to promote sustainability as it does not enhance the profitability of the aquaculture industry. The intrinsic and extrinsic values of the earlier research were not profitable for the bio based industries (Titchener-Hooker Wilson, 2016). Significance of Research and Development The research and development program enhances the knowledge and thereby determines different aspects related to the issues or problems. The research and development program influences the considerable amount of the empirical research on the innovation and product development. It generates ideas and accumulation of skill and current knowledge level among the producer of products and services. The quality of manufactured product accelerates with the development of the new product. The research and development (R D) program plays a significant role in the development of human capital and technical advances. The activity of the research and development increases along with the market awareness. It examines the availability of nature and magnitude of the dependent assumptions which in turn support the findings of related concern (Jankowski Tassey, 2005). The research and development indicates the efficiency and effectiveness of economic solution to the environmental and social problems. It also fosters growth and development in the business activities and optimum utilization of scarce resources. Many business sector investment activities largely focus on the development as they basically concentrates on the incremental support rather than on the transformative support (NSF, 2012). However, research and development involves huge cost but in return it maximizes wealth for the company's activity. The success of the company largely depends upon the global ideas and the innovativeness which can be generated through the process of research and development strategy. By following the process of research and development, a company can enhance its productivity and thereby also improve its strategic management approaches (Barge-Gil Lpez, 2013). There are numerous advantages of implementing the program of research and development (R D). In addition, it contributes towards the vital role in the creation and propagation of the existing knowledge and thereby satisfies the comp any's long term objectives within the industry (Khan, 2015). In today's economic situation, most of the companies are engaged in the research and development program as it leads to profitability through enhancing quality of the products and bringing innovativeness in the existing production and development strategy. It aims to establish new techniques and knowledge for the further economic and social growth to the company. The application of research and development designs the production plan for the new improved material and products and technical devices. However, the research of any related product does not directly increase the benefits for economic development. Whereas, the development leads to clearly identify the viability of the product in the market. The development phase of the product refers to the implementation of the intended and new product with the creativity and enhanced knowledge. Moreover, research and development in the companies often raises increased amount of capital which in turn becomes a part of strategic alliance in the product development and innovation. The expenses on the research and development helps to maximize benefit at the later stage of new product implementation as it attracts many consumers with the advancement in technology. It improves the sustainability of the product and thus, also leads to add value towards the society and economic growth as a whole (ACCA Global, 2016). Fair market value patent The patent value system is one of the major leading tools for avoiding any misuse of the new research and inventions of the product (Hall et al., 2004). It is a critical analysis of productivity gain and thereby has a greater impact on the company's activity. Every organization seeks to acquire new opportunities for the development of the product. Therefore, the market value of the patent should be fair in nature (Appraisal Economics, 2016). There are various approaches to calculate patent value including market, income and cost approaches (Pitkethly, 1997). Calculation of Fair Market Patent Scenario 1 2013 2014 2015 2016 2017 2018 Grant received 500 BSF costs incurred -170 -170 -160 -100 -100 Expected Market Value 700 NET CASH FLOWS 500 -170 -170 540 -100 -100 Discount rate 8% Fair Market Value (Present Value) AUD 579.18 Scenario 2 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Grant received 500 BSF costs incurred -170 -170 -160 -100 -100 Expected Market Value 200 200 200 200 200 200 200 200 200 200 NET CASH FLOWS 500 -170 -170 -160 -100 -100 200 200 200 200 200 200 200 200 200 200 Discount rate 8% Fair Market Value (Present Value) AUD 779.28 Assumption of the patent valuation The expected growth, discount rate and economic life of asset of the BSF Ltd. Is likely to be change in the next coming years. The patent market value measures all the legal and economic existence (Abrams Akcigit, 2013). Journal Entries for the Research and Development Transactions Date Particulars AUD $ AUD $ 2012-13 Grant from Commonwealth Scientific and Industrial Research Organization (CSIRO) A/c To Bio Sustainable Feeds (BSF) LTD. Dr. 500 million 500 million 2012-13 Expenses on Alternative Aquaculture Feeds A/c To Cash A/c Dr. 100 million 100 million 2013-14 Research A/c To Cash A/c Dr. 500 million 500 million 2014-15 Development A/c To Cash A/c Dr. 200 million 200 million 2015-16 Development A/c To Cash A/c Dr. 200 million 200 million (The Office of the Australian Accounting Standards Board, 2008) How reasonable is the assertion The management of Bio Sustainable Feeds (BSF) Ltd. has stated that the values of the patent were likely to be established from the company with having a limited control more than the technology of bacteria based feeds. This claim was reasonable as the earlier researches conducted by the BSF Ltd. were thrive to fail. Therefore, concerning with the issues and problems related to the research, company has developed the innovative method of researching which defines the use of bacteria to create the fish feeds. In the earlier researches, conversion rate was not actually measured which in turn leads to the loss of cost to the company (biomar, 2016). The increased risk of the health issues is growing rapidly with the multiple challenging problems. Although, the production of fish feeds through bacteria facilitates certain success at the Bio Sustainable Feeds (BSF) Limited and thereby it also reduces costs in the development of the feeds product within a market. Thus, in the recent research es it has been observed that bacteria based feeds increases the efficiency for the natural and environmental issues of fish feeds (Flint Garner, 2009). Conclusion This report includes all the major concepts related to the research and development and thereby also includes the valuation of patent. BSF Ltd. is an Australian based company that engages itself in the research of bio based products. The earlier researches of the company are likely to be failed, therefore in response to these issues BSF Ltd. has started researching the utilization of the bacteria based feeds. References Abrams, D.S. Akcigit, U., 2013. Understanding the Link between Patent Value and Citations: Creative Destruction or Defensive Disruption?. ACCA Global, 2016. Research and Development. [Online] Available at: https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/rd.html [Accessed 21 September 2016]. Appraisal Economics, 2016. Valuation of Patents. [Online] Available at: https://www.appraisaleconomics.com/valuation-of-patents/ [Accessed 21 September 2016]. Barge-Gil, A. Lpez, A., 2013. 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