Is the biological assets measured by historical cost value-related?

For listed agriculture companies,resource allocation decisions based on biological asset information of investors is related to the sustainable development. We examine the impact of the implementation of China Accounting Standards No.5 - Biological Assets (CASS) on the value relevance of biological assets, which is essential convergence with International Financial Reporting Standards (IFRS), by analyzing the data from 2002 to 2016 of A-share listed companies in Shanghai and Shenzhen Stock Exchange. We find that, under historical cost-measurement model, the value relevance of the biological asset information of Chinese listed companies increased significantly after the implementation of CASS. Further analysis shows that the value relevance of biological assets for groups under analyst following was higher than the others, which suggests that analyst following plays an alternative governance function. The results indicate that the biological asset information measured under historical costs model has value relevance and provide empirical evidence from emerging market for the revision of IAS41 in 2014. It shows that the development of capital market information intermediary can enhance the value relevance of biological assets information, and facilitates the sustainability of agricultural enterprises in emerging market under the absence of strict external regulations and other infrastructures.