How and why does someone decide to start a business? Normally, the entrepreneurial process arises with an innovative idea of a product or service. The first thing that entrepreneurs do is to decide if their idea is worthwhile. Is it really a good idea? Is the product or service viable from the technological point of view? Is it going to sell? What results does market research reveal?

To answer these questions, entrepreneurs conduct feasibility studies and, if the results are encouraging, they make a business plan.

The feasibility study analyzes the product, the industrial sector, the organization and the economic aspect. The business plan investigates in greater detail whether the product will have sufficient demand to make its commercialization worthwhile and which business model is the most attractive for marketing it. It also analyzes the production and organizational aspects, and finally an economic and financial assessment of the business is made to determine the profitability of the enterprise. All those aspects help to have a detailed picture of what the business will be and to minimize the risks involved in creating new businesses.

Today, virtually all cautious entrepreneurs draw up business plans before marketing their product or service. However, the same importance is not given to integrating the market and “non-market” aspects.

Market considerations include the interactions between the company and other private agents, which are voluntary and consist of economic transactions and exchange of property. Non-market factors are those of society – public institutions, beneficiaries, government and the media – and they may be voluntary or involuntary.

Baron (2013) proposes that the non-market environment be analyzed and characterized according to four factors: issues, interests, institutions and information. Issues are the basic unit of analysis and focus. For example, in agricultural biotechnology, the issue is the discussion of regulatory policies for genetically modified food and the public’s reaction to these foods. Interests are the individuals and groups with certain preferences on the issue. Those with the main interests are the agricultural biotechnology companies, such as Monsanto; activists who are concerned about the dangers of biotechnology, like Greenpeace; and the public, which also has certain points of view on the matter. Institutions are those responsible for regulating interests. There may be government institutions, such as regulatory and legislative agencies. In the case of Mexico, there are the Federal Commission for the Protection against Sanitary Risks (COFEPRIS, acronym in Spanish) and the Inter-secretarial Commission on Biosecurity of Genetically Modified Organisms (CIBIOGEM, acronym in Spanish). In addition, there are non-governmental agencies, such as the media, and the public itself, which has certain feelings and resentments that come from their values and culture.

Information comes from the interested parties and from what institutions know and believe about the issues. In the case of biotechnology, much of the information concerns, on the one hand, the dangers to health and the environment of genetically modified products, and on the other, the greater efficiency of food production.

The relevance of the analysis will depend on each sector and the new technology to be marketed. The sectors in which the government plays a key role – because they require more regulation – are those in which it is imperative to analyze non-market strategies.

The task of the entrepreneurs of new technologies is first to identify how important are the non-market factors, and in the event that they are relevant, to formulate and implement strategies that address the non-market issues of the new company.

For example, Google’s self-driving cars appear to have many advantages. According to the experts, these cars will reduce traffic, accidents, energy consumption and air pollution. From the engineering standpoint, they have been proven to work. Undoubtedly, the market demand will be great, and Google will create an innovative business model to market it, because the business plan makes it look like a very attractive business.

However, in order for it to really reach full market potential, it is necessary to analyze the non-market aspects. To market a new technology, it is not enough to know that there is a market and the technology works, but the entrepreneurs need to know what are the opportunities, challenges, public policies and public opinion.

One of the biggest challenges for Google cars is that in the United States, legislation varies by state. Currently, only four states allow self-driving cars on the road; another 11 states are studying the idea, and eight states have discussed it and failed to approve the cars. Discussion has not even begun in the rest of the country.

Another problem is the opinion of the media. In mid 2015, the official U.S. agency responsible for traffic security expressed its concern that hackers might attack self-driving cars and endanger public security. Other media warned that although self-driving cars are safe, they are not programmed to deal with other motorists who do not respect traffic signs. Public opinion has its own impression of the risks and benefits of self-driving cars.

The point is that a good part – if not all new technologies – needs to consider the non-market factors in the first stage, and this can make the difference whether or not they achieve their full market potential.

Entrepreneurs should take into consideration which public policies encourage or discourage the new technology. Many new technology companies develop personal relationships with deputies and senators, and that is a very valuable non-market asset. In addition, entrepreneurs with similar technologies can come together to formulate and implement joint non-market strategies, often through industrial chambers or associations. In this way, information can be provided and studies conducted that demonstrate the benefits (or the problems) of the new technology not only to lawmakers, but also to the media and the public.

In extreme cases, an entrepreneur may be forced to change certain aspects of his product or service to minimize the vicissitudes of the new technology.

Understanding non-market factors can give leadership to the company, and thus, higher profits, a better impression among future investors and more elements to face the competition. It is also important to analyze the non-marketing strategies of the competition. If the competition is very active in the media or among legislators, it will surely have the market leadership, even though its new technology is not the best.

In summary, for a product to be successful on the market, in addition to knowing if it works technically and if it has a large potential market, it is also necessary to know what non-market aspects are crucial and may be an opportunity or a challenge for the new technology. To do this, the four factors of the non-market environment must be analyzed and an appropriate strategy be developed.

References

Baron, D. (1995). “Integrated Strategy: Market and Nonmarket Components”. California Management Review. 37 (2) 47-65.

Baron, D. (2013). Business and Its Environment. Pearson.

Stine, D. Non Market Analysis. Video https://www.youtube.com/watch?v=oiDsFNC6VCI&feature=youtu.be

Development banks are instruments of economic policy of the federal government, which should have an impact on development when used properly. However, despite their financial soundness, they did not fulfill their mission, therefore new definitions and operational changes were required.

One of the objectives of the financial reform is to solve the problem that although the Mexican financial system has healthy financial intermediaries, the financing of companies and productive projects is very low. That is, the strengths of the Mexican financial system have not been reflected in development, and strategic sectors such as micro and small enterprises, agriculture, entrepreneurs, infrastructure and housing do not have sufficient access to credit ¹

Internationally ², prosperous development banks have been able to identify and mitigate market failures, and have complied with a well-defined mandate, using innovative financial instruments, care of their financial sustainability, and have adopted sound banking practices in in the field of corporate governance. Therefore, several measures are being considered in the financial reform to strengthen the Mexican banking system: redefining its mandate, relaxing its regulatory framework and setting measures to improve its operation.

Justification of development banks
The first theories of the financial systems stressed the role of the mobilization of savings to invest in productive activities that foster industrialization. Today we know that the functions of financial systems are much broader: They provide payment systems; mobilize savings and provide credit; monitor and ensure that the credit is used correctly; and limit, group and put a price on the risks.

An efficient financial system is a prerequisite for promoting economic development; however, there are failures in financial markets due to problems of information. The imperfections of the financial markets impede the proper allocation of resources, so that markets alone have no effect on the development that they desire.

The State has elements to compensate for market distortions, so normally its participation in the financial system is warranted. Levy et al et al.³ classify the case for State intervention in the banking sector into four groups: the need to maintain the safety and soundness of the banking system, the need to overcome the problems of asymmetric information, the need to finance projects that are socially valuable, and the need to promote financial development..

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The existence of development banks is justified by three of these four reasons: 1) it contributes to overcoming the problems of asymmetric information, which facilitates the access to financing, for example, of micro and small enterprises; 2) it finances socially valuable projects, such as major infrastructure works and sustainable projects; and 3) it offers efficient banking services.

The importance of State intervention is not the degree of intervention in itself, but its quality. The role of development banks in the financing of development is to serve as a catalyst, that is, to accelerate the efficient allocation of resources. At the same time, its intervention should not generate inefficiencies in the financial markets.

The manner of operation and the instruments of development banks depend on the market failure that one wants to remedy. It is not a matter of deciding whether a bank is first-tier or second-tier, but what are the appropriate instruments to comply with that mandate, as it may be first-tier, second-tier or mixed.

In carrying out their functions, development banks are at risk, which inevitably has an impact on their financial structure. Thus a circle is closed: The bank tries to have an effect on development, it manages the risk appetite and through an appropriate bank management it takes care of financial solvency.

Mandate of development banks
Development banks finance valuable projects for society that do not interest the private sector because they are not very profitable; that is, the private sector has few limited incentives to finance projects that produce externalities.

Rudolph⁴ believes that the mandate of development banks should cover the sector to meet the rules of cooperation with the private sector and minimal levels of efficiency. This consideration is complied with in Mexico, as each sector attended by a development bank is defined by a market failure. The role of development banks is complementary to that of the private sector. The Basel regulations are applied to this banking in regard to the amounts of capitalization to ensure its efficiency and financial stability.

The National Financing Development Plan 2013-2018 ⁵ stipulates that development banks are “institutions that carry out the service of banking and credit, subject to the priorities of the National Development Plan, and in particular the National Financing Development Plan, to promote and finance sectors that are mandated in in the organic laws of those institutions.”

In Mexico, the sectors in which a market failure occurs and which require a development bank are agriculture, ⁶, housing, infrastructure, exports, and micro and small enterprises, in addition to the lack of savings instruments for certain groups of the population. The table presents the development banks7 that operate in Mexico and their objectives:

	Institution of development bank	Objective
	Banco Nacional de Comercio Exterior, S.N.C.	To promote and finance foreign trade. To ensure efficiency and competitiveness of foreign trade in the stages of pre-export, export, import and replacement of goods and services.
	Banco Nacional de Obras y Servicios Públicos, S.N.C.	To finance or refinance public or private projects of investment in infrastructure and public services, and help the institutional strengthening of the federal, state and municipal governments.
	Banco del Ahorro Nacional y Servicios Financieros, S.N.C.	To promote savings, financing and investment among members of the popular savings and credit sector; to offer financial tools and services, as well as channelling financial and technical support to encourage the habit of saving and the development of the sector and, in general, national and regional economic development of the country.
	Nacional Financiera, S.N.C.	To promote savings and investment, such as channeling financial and technical support to industrial development and, in general, national and regional economic development of the country.
	Sociedad Hipotecaria Federal, S.N.C.	To promote the development of primary and secondary markets for mortgage lending, through loans and guarantees for the construction, adquisition and improvement of housing, preferably for low income families. To increase production capacity and tecnological development related to housing.

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Summary
Financial reform starts from the supposition that it is essential to modernize development banks to transform them into a useful tool to strengthen the country’s economy.

The existence of development banks is justified because of the failures of the financial markets.

In Mexico, the development banks serve a specific sector of the private sector in which there is a market failure.

Bibliography

Gutiérrez, Eva, P., Rudolph, Heinz, Homa, Theodore, y Blanco Beneit, Enrique (2011). Development Banks, Role and Mechanisms to Increase their Efficiency, Policy Research Working Paper. The World Bank.

Levy Yeyati Eduardo, Micco, Alejandro, y Panizza, Ugo (2004) ¿Es conveniente la banca estatal? El papel de los bancos estatales y de desarrollo. BID.

Rudolph. Heinz (2012). State Financial Institutions: Mandates, Governance, and Beyond. The World Bank.

SHCP. Programa Nacional de Financiamiento del Desarrollo 2013-2018. Government of Mexico. México.

SHCP (2013). Presentación de la Reforma Financiera y Exposición de Motivos del Decreto por el que se Reforman, Adicionan y Derogan diversas disposiciones que dan origen a la Reforma Financiera.

Values are mental processes that can transform our basic needs (survival, belonging-social recognition, and group transcendence) into core goals that guide our lives and impact our attitudes, behaviors, and decisions.

In this way, a young computer expert satisfies his fundamental need to belong to a social group and obtain recognition by its members: by becoming an expert in a specific programming language, always keeping up to date in the knowledge of his field, and seeking to be a perfectionist in what he does. Or a tenacious social entrepreneur struggles through adversity to operate a SME organic coffee processer that contributes to the sustainable social development of the community where she was born and raised, so that her town prevails and transcends its circumstances.

More than 15 years ago, in order to measure those mental processes as contextualized in the world of organizations, the Work Values Scale (EVAT, its acronym in Spanish) was developed. The main objective was to create a test that was easy to apply (both by its fill-in format and because it could be completed quickly) and based on a solid theoretical model. Although there was already a long tradition of measurement of values toward work, virtually all of the tests created up to that point had arisen in the field of vocational behavior, with the specific aim of helping high school students choose their profession. Moreover, the two most popular tools for measuring work values in employees at the time had certain limitations. One the Comparative Emphasis Scale (CES) was not based on a solid theoretical structure, and used a rank-order scale that required weighing of the values in question. Weighing of values hinders the application of questionnaires to people with a low educational level, increases the amount of time to fill it out, and it restricts the use of some statistical tests. The other popular instrument at that time was the Achievement Motive Questionnaire (AMQ), which, though easier to administer and based on a theoretical model validated in a number of countries, did not consider key values in the world of organizations, such as power, influence, authority, or prestige. Faced with these factors, it resorted to adopting the model from the Schwartz theory of value content and structure – the most widely used in the field of social psychology to study individual values – as a theoretical framework of reference to analyze and measure values toward work.

Schwartz’s model establishes that any value, of any person, can be classified into one of 10 types (or four higher-order values), considering the motivational goal pursued by the value in question. Figure 1 shows the four higher-order values measured by the EVAT, located at the ends of each of the large bipolar dimensions that form the two visible dates, as well as the typologies of specific values that are contained for each high-order value. In one of the bipolar dimensions, two opposite high-order values are clearly identified. One, openness to change, includes all the values whose common denominator is constant change, like the pursuit of one’s own intellectual and emotional interests, and at the other end, conservation, which brings together all the values relating to the maintenance of the status quo and the search for stability in personal and group relationships. The other bipolar dimension contains the high-order values self-enhancement and self-transcendence. The first deals with values that share the motivational goal of the ongoing pursuit of self-interest over the interest of others (i.e., trying to prove that one is above others and that one’s ideas and decisions are the best), while at the opposite end is found self-transcendence, which includes values associated with the ongoing pursuit of the welfare of others above one’s own good. Table 1 shows the specific definitions of each of the values contained by a higher-order value.

The EVAT measures the four higher-order values of Schwartz’s model through 16 items. Each item briefly describes the behavior of a person, which reflects the value being evaluated, and in each description the person who takes the test is asked to rate the degree to which the person described lies on the scale between (1) is totally different from me to (7) is identical to me. The reader is cordially invited to complete the test by clicking here. To get the score for openness to change it is necessary to average the values for the questions 1, 5, 9 and 13; for conservation: questions 2, 6, 10 and 14; self- enhancement questions 3 7, 11, 15; and self-transcendence : questions 4, 8, 12, 16. Once the scores are calculated, the most interesting thing is to locate where scores lie with respect to the large sample of nearly 5,000 employees from all geographical regions of Mexico. To access the table with the national percentiles, simply click here. n the following paragraphs, some of the uses of the EVAT are described, both in the field of research and in the management of human resources.

When people assume a new position or begin to work at a new company, this generates a series of expectations regarding how challenging their new tasks will be, how enriching they’ll find their coworkers, how effective their new boss will seem, and so on. Over time, employees make a comparison between their expectations and what they really experience on the job. If the expectations are met or exceeded, they will experience satisfaction; when reality is below these expectations, they will feel unsatisfied. When making these comparisons, employees they tend to use referents: that is, other employees whom they perceive as equal. Functioning on the assumption that people high in self-transcendence values tend to pay less attention to the cost-benefit analysis between what they give and receive from their company, and that they tend not to be obsessed with comparing themselves with others, a study was conducted of 3,201 employees in Mexico who worked in 30 different companies, to analyze if their work values influenced their levels of job satisfaction. The results showed conclusively that employees high on self-transcendence were consistently more satisfied with their jobs, irrespective of the facet of satisfaction (supervision, co-workers, compensation, development, stability) being measured. Conversely, those with high self-enhancement tended to be dissatisfied, because they constantly increased their expectations.

Although employees with a high level of job satisfaction tend to be punctual and rarely miss work, there is no conclusive evidence to prove that satisfied employees are more productive, do more than their job description demands, or make extra efforts when the company is in trouble, work behaviors that are predictable in employees with high organizational commitment, specifically a high affective commitment. Organizational commitment is the psychological attachment that employees develop toward their company and is manifested in three facets or components: a) I am there because I want to be there and I like working for this company (affective); b) I am there as a mere material-instrumental convenience or because I do not have better opportunities in the job market (continuous); and c) I am there because I feel a moral obligation to remain at my company (normative). In order to analyze whether the work values of the employee could, to some extent, predict their organizational commitment, a study was carried out in eight companies in northeastern Mexico using a sample of 982 employees. The study compared classical factors that have been shown to impact the development of employee commitment, such as the knowledge of organizational objectives, perceived empowerment, the effectiveness of the training received, and the work values of the employee. The results of the study indicated that employees high on self-transcendence tend to have a greater predisposition to develop an affective commitment toward the company. With regard to the continuous, employees high on conservation and low on self-transcendence were found to have the highest levels on this dimension, which confirms that these individuals seek to keep what they have, do not run risks, and have little concern about others.

Some Practical Uses of the EVAT

The EVAT has been used, for example, as a tool to measure the effectiveness of a comprehensive training program on clinical ethics given to physicians and nurses at one of the largest hospital networks in Latin America. The free, online, six-month course was distributed in five modules (for example: medical ethics or methodologies for ethical discernment), and was designed to train health professionals to make ethical decisions when faced with the kind of complex dilemmas found in their everyday working lives at clinics and hospitals. The EVAT was used to identify changes in the priorities of work values of the 973 participants who took and passed the course, applying the test before starting the program and once they passed it. The results of the study revealed important, statistically significant changes in self-transcendence and openness to change, increasing their average and decreasing their variances. Another, incidental finding was that medical personnel with high self-transcendence scores were found to be more satisfied with their jobs, since the values associated with self-transcendence (benevolence, altruism) are aligned with the ultimate goal of medical practice.

The EVAT has also been used to identify priorities of the values toward the work of traffic police officers in the metropolitan area of Lima. The main objective of the study was to compare if the priorities of values toward the work of law enforcers were listed in accordance with the hierarchy shown in the police profile published by the Legal Defense Institute of Peru, in a representative sample of 203 members of this union, and if there were significant, identifiable differences between the men and women who performed the job. The profile of priorities found was the following: (1) self-transcendence; 2) openness to change; 3) conservation; and 4) self-enhancement, which coincided with the ideal profile, with no significant differences found between men and women in either the order or the scores of the four values.

The fallout from the global financial crisis of 2008 triggered a period of severe unemployment in Spain. As a result, Barcelona’s city government, through one of its community service publications, recommended that its unemployed citizens deepen their self-knowledge by taking psychometric tests, including the EVAT, to help them identify their work values and seek greater professional guidance.

Fifteen years since its development, the EVAT has proved to be a useful tool for measuring values at work, both in the field of research (as in the trenches of Human Resource Management), and as a tool for self-knowledge. Its use has extended beyond Spanish-speaking countries, and there is evidence of its good performance in other Romance languages, such as Portuguese and Italian.

Recommended reading:

Altamirano, et al. (2013). Promoting networks between evidence-based medicine and values-based medicine in continuing medical education. BMC Medicine, 11:39

Arciniega, L.M. y González, L. (2000). Desarrollo y validación de la escala de valores hacia el trabajo EVAT 30. Revista de Psicología Social, 15, 281-296.

Arciniega, L.M. y González, L. (2005). Other-oriented values and job satisfaction. Problems and Perspectives in Management, 4, 128-132.

Arciniega, L.M. y González, L. (2006). What is the influence of work values relative to other variables in the development or organizational commitment? Revista de Psicología Social,21, 35-50.

Arciniega, L.M., González, L., Soares, V., Ciulli, S., y  Giannini, M. (2009). Cross-cultural validation of the Work Values Scale EVAT using multi-group confirmatory factor analysis and muldimensional scaling. The Spanish Journal of Psychology. 12, 767-772.

Grimaldo-Muchotrigo, M.P. (2008). Valores hacia el trabajo en un grupo de policías de tránsito de Lima metropolitana. LIBERABIT, 14, 71-80.

To hear the term “biological assets” we automatically imagine a living being, like cells, microorganisms, insects, animals or plants. In the field of accounting, we will focus on the management of agricultural activities.

Do we know what biological assets are in accounting terms (Table 1)? Are they presented under the heading of inventories? At what point in the life of a plant or animal should I keep an accounting record?

As agricultural activity represents an important productive sector in Mexico, it is worth pausing to review its financial regulations. The Consejo Mexicano de Normas de Información Financiera, A.C. (Mexican Board of Financial Reporting Standards) (CINIF), an independent body that began operations in 2003 and collaborates with public and private sector agencies, aims to issue accounting standards in Mexico, which are transparent, objective and reliable and, as far as possible, in alignment with the International Financial Reporting Standards (IFRS).

Financial reporting standards are mandatory and help organize the accounting processes, as they give us the basis for assessing, presenting and disclosing financial information that is useful for decision making. In general terms, “to appraise” is to assign or give a value to the concepts of the financial statements, “to present” refers to the way to correctly display the items in the financial statements, and “to disclose” is to expand or break down the content of theses concepts in the notes to the financial statements.

The International Accounting Standard 41 must be applied for the recognition of biological assets. Its equivalent in Mexico is the Norma Mexicana de Información Financiera (Mexican Financial Reporting Standards) E-1 (NIF E-1).

According to NIF E-1: “A biological asset is a living animal or plant. A group of biological assets is a grouping of similar living animals or plants.” Specifically, the standard applies to biological assets that because of qualitative or quantitative changes are capable of undergoing a biological transformation, that is, they go through a process of: a) growth, those that have not completed the process of biological development; b) degeneration, a decrease in quantity or deterioration in the quality of an animal or plant; c) production and procreation, those that have completed their development process and are able to bear fruit; and d) completion, specifically those that have completed their biological development process and are in condition to be sold, transformed into agricultural products or used in other productive processes.

To understand the steps of recognition, registration and valuation of biological assets, let us consider the example of livestock, for which it will first be necessary to explain certain terms and provide some definitions contained in the NIF E-1.

The evolutionary periods of livestock are as follows:

1. Birth: From birth to 8 days
2. Growth: From 8 days to 6 months
3. Development: From 6 months to 14 months
4. (Operation) Exploitation: From 2 years
5. Discard: After 4 or 5 births

In addition, the biological cycles of livestock are defined in the following five stages

1. Breast feeding calf: From 1 day to 2 months
2. Weaned calf: From 2 to 6 months
3. Developing heifer: From 6 months to 12 months
4. Gestating herd *: From 14 to 17 months
5. Herd in production: From the first birth

* Herd: A number of animals of the same species or the same characteristics.

• Agricultural activity. It will be so regarded when living plants and animals are able to have biological transformations, when the same management facilitates and promotes the conditions to carry out the biological transformation and when these qualitative and quantitative changes are measurable and verifiable.
• Harvest.  Separation or detachment of a product or a biological asset, or the cessation of the life process of a biological asset. The process of the asset after the harvest is not subject to regulations by the NIF E-1, but must be guided with the NIF C-4 Inventories standard..
• Agricultural product.  A product harvested from a biological asset, property of an entity. Fruits obtained from biological assets or the completion of the biological process. They will be taken into account until their disposal or until they are used as input for another production process.
• Fair value. The price that market participants would be willing to receive when selling an asset or paying to transfer a liability between interested and informed parties in a free market transaction.
• An active market. . Markets in which items that are traded are homogenous and in which buyers and sellers can be found at any time with the prices available to the public.

Accounting Policies

It should be clear that for a biological asset or an agricultural product to be recognized as accountable as such, it must meet three requirements established by the standards: 1) the entity controls the asset as the result of past events; 2) it is probable that the future economic benefits associated with the asset will flow to the entity; and 3) the fair value or the cost of an asset can be determined in a trusted, verifiable and objective way. This fair value should decrease in the estimated costs up to the point of sale. If it is not possible to determine the fair value because it is not reliable or in the absence of an active market, then it will be registered at the cost of production less depreciation or accumulated wear and any loss due to deterioration of the same asset.

In the case of livestock, biological assets originate from purchase, birth in the deliveries of the heifer or livestock in production. They should be appraised each time that a statement of financial position is submitted at fair value, or in the specific case of initial recognition, if it is not possible to obtain the market prices or they are not reliable, then they will be appraised at the production cost less the accumulated depreciation and if there is any loss due to deterioration. It must be clear that this would be only in the initial recognition. After, when the fair value of the asset is determined, it will always be at that value less the estimated costs of the point of sale, as a biological asset will be appraised.

The accounting recognition must be carried out during the period in which the biological transformation is performed; for example, for the birth of a bovine, the recognition will be made at the fair value of a bovine eight days after birth. The fair value of the bovine must be determined on the basis of the market price of livestock of the same age, species and genetic characteristics.

The initial accounting record by birth will be as follows:
Debit: Biological assets in growth and development
Credit: Income

If the initial recognition is by purchase of the livestock, the registration will be as follows:
a) Livestock purchased newborn:
Debit: Biological assets in growth and development
Credit: Banks/Suppliers
b) Livestock bought for production or exploitation:
Debit: Biological assets in production
Credit: Banks/Suppliers

After this initial recognition, costs (such as food, vaccines, medicine and others) must be accumulated during growth and development, and earnings or losses are recognized when presenting the financial statement, depending on whether the value is greater in the books or the fair value of the asset. The same thing occurs if one has livestock in production; then, one must compare the value in the books with the fair value and determine the gain or loss.

In Mexico, in general those who are dedicated to the breeding and development of biological assets are family businesses, ranches that are inherited, which although they have accumulated knowledge, they do not rely on the best practices for the purposes of accounting recognition. In addition, in most cases, they do not know the operating expenses, the real value of their assets, how to assess them and present them in a financial statement and even how to declare them, so they lack information in order to make good decisions and they do not understand the risks they face.

In this situation, family businesses are unaware of their real gains or losses. If we are able to train the owners or managers of these family businesses even on a small scale, we would contribute so that this sector would see their business from another perspective, so that with the financial information that is issued, it will know how to determine profit or loss and know the amount of the flows generated by their operation to make better decisions.

Table 1. Examples of biological assets, agricultural produce and products that are the result of a process after the harvest.

References

CINIF-IMCP, “Boletín E-1 Agricultura”, Normas de Información Financiera (NIF), 11a. ed., México, IMCP, 2016.

CINIF Consejo Mexicano de Normas de Información Financiera. http://www.cinif.org.mx/2014_nor_emitidasvigentes.php Consulted on January 17, 2016

KPMG Accounting Advisory Services NIC 41 Activos biológicos y prácticas europeas de aplicación, December of 2008 KPMG in Chile https://www.kpmg.com/CL/es/IssuesAndInsights/ArticlesPublications/Documents/2008-12-kpmg-advisory-activo-biologico.pdf Consulted on January 17, 2016

Bolsa Mexicana de Valores. Industrias Bachoco S.A.B. DE C.V.
http://www.bmv.com.mx/docs-pub/infoanua/infoanua_590798_2014_1.pdf Consulted on January 17, 2016

Manual para el manejo de bovinos de doble propósito
http://sgpwe.izt.uam.mx/files/users/uami/mvzjmvr/Manejo_Bovino_Doble_Prop_sito.pdf Consulted on January 18, 2016.

The figure of the public accountant has always been indispensable. However, globalization has resulted in greater operational complexity and an undeniable need to meet international standards.

The accounting profession has had to adapt and evolve with the environment. The figure of the traditional public accountant is no longer sufficient, rather it must be prepared to meet all these needs.

The accounting profession is facing great challenges, but it also has many opportunities. Every day companies require a higher level of competitiveness in their employees, and universities must prepare their students to meet the demands of the labor market and confront this globalized and competitive world.

Traditional education is being left behind. Universities are modifying their curricula so that students acquire skills, abilities, attitudes and values in their academic formation in order to thrive in the labor market. Among the various teaching models, competency-based training is currently considered as contributing best to this new learning.

There are general and specific skills. General skills are based on the development of personal, interpersonal and social environments, while specific skills are those with which graduates begin their professional life. With regard to the specific competencies of the public accounting degree, the current study plan should promote a teaching-learning process in the comprehensive formation of the accountant.

These ongoing changes in the environment that have so much influence on the professional development needs of the accountants are, among others, the following:

• An increase in the depth and complexity of the operations.
• A growing range of specialties in accounting, with different learning needs.
• An increase in the demand for accountants able to work in different sectors and countries.
• The creation of new ways of presenting information, such as integrated reports.
• The constant updating of information technologies (IT), such as databases.
• The increasing adoption or standardization of the International Financial Reporting Standards.
• The need to acquire vocational skills with critical judgment.

Companies are going to recruit graduates who, in addition to their technical expertise, possess attitudes and skills to cope with the changing world of business, because the future environment will be different. The market requires public accountants who know how to negotiate, handle conflicts and communicate, as well as work in multidisciplinary and multicultural teams.

The impact of technology and the global economy, new sources of competition and accountability, among other factors, have led to a change in the nature of the accounting profession, which announced the emergence of a new generation of accountants.

Accounting students join a work force that is transformed daily by technology. Technology is an engine of change that responds to the new information needs. It is increasingly necessary for accountants to have an analytical mind with a great capacity to manage and analyze databases.

The academic programs, in addition to providing a comprehensive education and training for work in a globalized environment, as we said above, should include subjects of other disciplines to cultivate analytical thinking, leadership qualities and the skills to solve problems in business caused by demographic, economic, climate and technological changes, among others. They should also include and reinforce training in ethics and social responsibility, as the accountant has to generate confidence in society, the company and the users.

Accounting programs should be comprehensive and focus more on processes and less on content, because there is an increasing need to learn more in less time.

Demographic changes have implications for public policies, health, taxation, consumer habits and conflicts between generations. The new order of emerging economies makes companies diversify and expand opportunities for growth for their employees. Climate change and the scarcity of resources require understanding of the impact of organizations on the environment.

In accordance with the Brundtland Commission report, “sustainable development is not a fixed state of harmony, but a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are made compatible with future as well as current needs.”

Each day, sustainability and social responsibility are gaining more importance, and accountants must be familiar with these areas to contribute to the strategy and decision- making process in the organization, in order to generate value.

Finally, in addition to the above, the curriculum should consider ways to provide students with opportunities to get closer to the real working world through internships and study with professors who have extensive experience in business to help reduce the gap between theory and practice. Teachers themselves should be aware of the need to convey the latest knowledge in their field, and to do this they must be continuously up to date.

Public accounting is a complete profession that requires a comprehensive approach and a strategic business vision, without losing its tendency toward specialization in different areas, especially on international issues.

References

Gibson et al. (2013), “Using Classroom Competitions to Prepare Students for the Competitive Business World”, The Journal of Effective Teaching, Vol. 13, No. 1, pp. 64-77.

International Accounting Education Standards Board (2015), Meeting Future expectations of professional Competence: A Consultation on the IAESB’s Future Strategy and Priorities. Consultation Paper.

PWC (2015). Data driven. What students need to succeed in a rapidly changing business world.

Dextre, J. (2013), “Formación profesional: Los retos de la formación por competencias del contador público”, Contabilidad y Negocios (8) 16, pp. 35-47.

Since the beginning of the 21st century, globalization has had a major impact on financial information regulations worldwide. There were profound changes in the issuing bodies, from their name to their form of organization and their processes for issuing standards to develop objective, reliable and transparent financial reporting.

The codes of ethics have also changed, both in the international area, issued by the International Federation of Accountants (IFAC), as in that applicable to Mexico, issued by the Instituto Mexicano de Contadores Públicos, IMCP (Mexican Institute of Public Accountants).

The issuing body of the International Accounting Standards – the International Accounting Standards Committee (IASC) – was transformed into what is now the International Accounting Standards Board (IASB), and the regulations that it issued, the International Accounting Standards (IAS), became part of the International Financial Reporting Standards (IFRS).

In Mexico, the previous issuer of standards, the Instituto Mexicano de Contadores Públicos, IMCP (Mexican Institute of Public Accountants), is currently part of the Consejo Mexicano de Normas de Información Financiera, CINIF (Mexican Board of Financial Reporting Standards), along with other founding organizations that belong to the regulatory sector, such as the Comisión Nacional Bancaria y de Valores, CNBV (National Banking and Securities Commission), the education sector, such as the Asociación Nacional de Facultades y Escuelas de Contaduría y Administración, ANFECA (National Association of Colleges and Schools of Accounting and Administration), and other sectors, such as the Asociación de Bancos de México (Association of Banks of Mexico), among others. The CINIF is responsible for carrying out the convergence of local standards with international standards and issues what is now called the Mexican Financial Reporting Standards (Normas de Información Financiera, NIF), in which reports prepared by the IMCP that remain valid are included. The Mexican Financial Reporting Standards have been in force since January 1, 2006. The following diagrams illustrate the transformations of the issuing bodies of standards internationally and in Mexico, as well as the standards that they issue.

In addition, the International Standards on Auditing issued by the International Auditing and Assurance Standards Board, which is also part of the IFAC, were adopted for all audit work beginning on or after January 1, 2012.

In a few years, one of the most significant changes in the accounting profession has been carried out. However, the changes cannot be stopped, and regulations adapt to the ever-changing economic environment. The CINIF continues its task of convergence to reduce more and more the differences between the NIF and the IFRS.

Mexico has taken another convergence process: the transformation of the code of ethics, which in its ninth edition aligns its content to the international code of ethics issued by the IFAC. This ninth edition has been in force since October 1, 2012. As in the issuance of the Normas de Información Financiera (NIF) (Mexican Financial Reporting Standards), adapted in accordance with the business environment of our country, the non-applicable or uncommon provisions in the accounting profession were eliminated and some of the provisions of the eighth edition that were not in the international code of ethics were added.

With the accounting profession acting in the public interest, it must have a strong code of ethics, which all members of the accounting profession should know and apply, regardless of the sector in which their activities are performed. To promote awareness of the code, since 2015 and in accordance with the newly transformed Norma de Desarrollo Profesional Continuo (Standard of Continuing Professional Development), all active partners of the federated associations to IMCP must complete five or more hours of ethics and professional responsibilities to receive annual updating and maintain professional knowledge certification, in order to ensure the quality of service to society and to obtain the endorsement of the certification. One of the options for complying with these required points is to take courses on the code of professional ethics.

The new code of ethics is divided into five parts:

Part A: General application of the code

Part B: Public accountants in independent practice

Part C: Public accountants in public and private sectors

Part D: Public accountants in teaching

Part E: Sanctions

Part A provides a conceptual framework that establishes and describes the characteristics of the five fundamental principles: integrity, objectivity, diligence and professional competence, confidentiality and professional behavior. It indicates that in the face of the threats to compliance with these fundamental principles, safeguards can be applied that eliminate or reduce them. These can be of personal interest, self-review, intercession by the client, familiarity and intimidation. Safeguards are divided into two main categories: those created by the profession, legislation or regulation, and those of the working environment. The first are, for example, corporate governance rules and professional standards; safeguards of the working environment depend on whether the activity is developed in independent practice or in the public and private sectors, which will be discussed in greater depth in Parts B and C, which also clarifies that it is impossible to describe all the circumstances and relationships that may create threats to compliance with the fundamental principles. Thus, it is recommended that those who perform their activities in independent practice and in the public and private sectors be alert to the circumstances and relationships.

Part B, “Public accountants in independent practice,” occupies 143 of the 195 pages of the code, more than 73% of the total. This part addresses the themes of professional designation, conflicts of interest, second opinions, fees and other types of remuneration, marketing of professional services, gifts and invitations, custody and management of customer assets, objectivity of all services and independence in the audit work and revision and in assurance engagements.

It is noteworthy that in the section of marketing professional services in Part B, it was previously forbidden to advertise and only client recommendations were accepted. Now, this code allows marketing if the independent public accountant issues announcements or other forms of marketing that do not bring discredit to the profession, that do not make exaggerated claims about the services offered or about the qualifications or experience of the professional, and that does not make disparaging references or unsubstantiated comparisons with the work of others. Furthermore, the final section of the code defines the word “advertisement” in the following way: “Communication of information to the public on the services provided by Public Accountants and their capabilities in independent practice, in order to obtain professional business.”

Part C, “Public accountants in the public and private sectors,” establishes guidelines concerning potential conflicts, preparation and reporting information, performance with sufficient expertise, financial interests and incentives. It states that accountants, who are responsible for the preparation and reporting of information that can be trusted both by the entities for which they work and the third parties involved, must promote a culture based on ethics.

Part D describes in a single page the obligations of public accountants in teaching: to guide students to act in accordance with the standards of professional ethics, to keep up to date in the areas of their practice, to treat their students in a decent and respectful manner, encouraging them to better themselves; to refrain from exposing real cases with information that identifies individuals, companies or institutions, unless the information is in the public domain; to refrain from making comments that harm the reputation of persons or the profession and, in general, to respect the prescribed discipline.

Part E indicates, also in a single page, the sanctions. It specifies that penalties will be imposed by the affiliated association to which the accountant belongs or by the Mexican Institute of Public Accountants. Depending on the severity of the act committed for the prestige and stability of the profession, the penalty may be: private reprimand, public reprimand, temporary suspension of the rights as a partner, expulsion, or complaint to the authorities.

A section with definitions of terms used immediately follows at the end.

Conclusion
The provisions of the code of ethics will be subject to constant review and, as with the Mexican Financial Reporting Standards, adaptations may be needed in accordance with changes in the environment. It will also be required that those who perform the various activities covered by the profession are kept constantly updated, that they know the changes that arise over time and that they transmit high ethical values that serve as an example to those who are starting out in the field.

References

IMCP (2012). Código de ética profesional, 9a. ed., México, IMCP.