A framework for supporting climate-exposed asset decision-making in agriculture.

In agriculture, long-lived assets are highly exposed to the changing climate which can erode their value and result in stranding. Stranded assets constitute a serious problem because they are generally low-liquidity investments, highly vulnerable to material devaluation, such as farmland and physical infrastructure. This can have a significant impact on the balance sheets of farmers and result in entire agricultural industries becoming unviable. Financial reporting standards are still being refined so that they can support improved accounting for climate-exposed assets. Yet, these are not readily being deployed by most agricultural businesses or their accountants. We explore the context of these standards and conduct interviews with accountants working in agriculture to explore improvements in how we cater for climate-exposed assets. Key actors note the need for clear decision criteria and improved data collection and sharing. We develop a decision tool to: firstly, support the accounting for climate-exposed assets; and secondly, improve understanding of measurement of climate-related risks. • Agricultural long-lived assets exposed to climate can have their value eroded. • Stranded assets are a problem for balance sheets of farmers and ag industries. • Financial reporting standards are being refined to support improved accounting. • Exploration of standards and interviews suggests clear decision criteria are needed. • Framework developed supports farm accountants assess climate-related risks to assets. [ABSTRACT FROM AUTHOR]