Every morning Azri uses the same path heading to his office in Universiti Utara Malaysia (UUM). Every time he enters the UUM's entrance, the green scenery and the fresh air of UUM's tropical lush never fail to impress him. The ambience of UUM is so peaceful and calm. UUM is known as the 'University in a Green Forest'. It is watered by two rivers that flow along the middle of the campus. Azri pulled his deepest breath. "Fresh!" he whispered.

Moving around the campus, he can see the ostrich, horse, peacock, duck, deer, and many more animals that become the main attraction to those who come to UUM. As long as he can remember, these animals are reported as 'living assets'. Mr. Azri is the UUM's accountant at Bursar Department, and he started to mainly review these assets after he had been transferred to the Asset Unit as the head of the unit. Not only 'living assets', but this unit was also made responsible to in charge the entire assets in UUM. In terms of reporting, the task of his group is to prepare the financial report of UUM's assets, including the 'living assets'. Suddenly, his tranquillity was disturbed. He remembered the order came by the UUM's Bursar last week, to accurately recognize, measure and disclose the value of 'living assets' according to appropriate accounting standard. All this while, UUM was using Malaysian Private Entities Reporting Standards (MPERS) in reporting and preparing the UUM's financial statements. Recently, the Malaysia Public Sector Accounting Standard (MPSAS) has been urged to be used to replace MPERS in reporting and preparing the UUM's financial statements. Azri thought whether to change the current Standard and if so, how to treat and disclose biological assets under the new accounting Standard.

Last few days when he attended the meeting at TISSA-UUM building, he coincidently met with one of the financial accounting lecturers, Dr Sitra. They had a small conversation about his job scope. Dr Sitra also impressed when she knew that Azri is the officer who in charge of the reporting of the 'living assets' in UUM. But when Dr Sitra told him that these assets are called "biological assets", he had no clue. "Biological assets?" he raised his eyebrows. Dr Sitra continued asking him on how these assets are managed, measured, recognized and disclosed. He left speechless for a few seconds. Then he replied - "Based on the current practice, these assets will be expensed in the current year of acquisition and not capitalized". Dr Sitra asked why the assets aren't capitalized, and Azri remained in silence. However, the conversation made him wondering – "These animals and plants, they are not static as they are growing and increase in quantity. By expensing these assets would be misleading in representing its value which does not reflect the value of total assets of UUM". He was thinking that this is the right time for his unit to start accruing the value of the biological assets in accordance with the appropriate accounting standard as proposed by the Bursar last week. The sense of urgency has now become more intense.  

Besides attending the workshop to comprehend the accounting treatment of these assets, Azri believed that Dr Sitra would able to help him for the initial start of recording the biological asset according to the relevant accounting standard. Dr Sitra and her colleagues agreed to help Azri as this is an exciting platform for the financial accounting lecturers to apply what they teach to students in the class. Azri and his team should start with one group of 'living asset' first. Therefore, Azri chose deer as the first target group of the animal to record the value according to the suitable accounting Standard. The reason to select deer as the first group of the animal to record is that the campus rears almost 200 deer. It is believed to be the significant population of the living animal on campus.

However, beforehand it is essential to understand the concept of 'Biological Assets' from the accounting view. Dr Sitra and the team have explained to Azri in brief regarding the biological assets and the accounting treatment practised by public listed companies (PLC) in Malaysia. However, Azri is now wondering the appropriate accounting treatment and disclosure requirement in reporting this 'living asset'?   

1. Identify the problem(s) faced by Mr Azri as stated in the case. (CTPS Question)