Tax impact of IAS 41 on the banana sector in Los Rios province

Abstract

The banana industry is relevant within the Ecuadorian economy. They participate from large companies to small farmers, for whom the sale of this product represents their main source of income. Companies in the sector must comply with their obligations, including taxation. Additionally, compliance with accounting regulations is required, where IAS 41 is of great importance. The present research project to know the tax impact generated by the application of IAS 41 in banana companies in the Province of Los Ríos, for this purpose the correct application of the standard has been analyzed, the tax reconciliation presented by the companies has been evaluated, and expert opinion has been sought. For this purpose, a group of companies was selected that are estimated to present relevant and reliable information, applying a descriptive research, with a qualitative approach. The results obtained determine that, although the standard is part of the policies of banana companies, in practice there are still aspects to improve. By working under a regime that calculates the tax directly from sales, the effects generated by the change by the measurement at fair value do not significantly impact the tax field.