Valuation of SGARAs IN THE Wine Industry: Time for Sober Reflection

The application of AASB 1037 Self Generating and Regenerating Assets provides little guidance to the commercial performance of winemakers. The valuation of grapevines essentially requires the valuation of a segment of a business (vineyards), from which is deducted the value of associated infrastructure. Grapevines are reported at a fictional "net market value" even though they cannot be bought or sold. The combination of recognising revaluation increments as distributable profits through the valuation of grapevines at "net market value", and the subsequent "amortisation" of those revaluation increments over the useful lives of the grapevines, creates a reporting maze which is more likely to confuse than inform.