Genetic Engineering

Genetic engineering
• Genetic modification/manipulation

• Direct human manipulation of an organism’s gene using

modern DNA technology

• Introduction of foreign DNA or synthetic genes in the

organism of interest
Genetic engineering

Has few Has the Has the Example:

limits; except potential to power to Goat with
our alter life on change who spider genes 
imagination, Earth we are that creates
and our "silk" in its
moral or milk.
ethical code
History

1973
• Herbert Boyer and
Stanley Cohen
combine their
research to create
the first successful
recombinant DNA
organism
1974
• Rudolf Jaenisch
creates the world’s
first transgenic
animals
1976
• Genentech, the first genetic engineering company was
founded
1978
• Genentech announced the production of genetically
engineered human insulin1982
• After approval from the Food and Drug Administration, the
first genetically engineered drug hits the market

History of Genetics: Genetic Engineering Timeline, Nov 12, 2009

FRAMEWORKS
FRAMEWORK
ETHICAL RESEARCH
FRAMEWORKS REQUIREMENT

●
Stakeholder Theory AP
PL
●
Six Pillars of Character IC
AT
●
Transparency Issues IO
N PROS AND CONS OF
GENETIC ENGINEERING

Genetic Engineering
ACCOUNTING
FRAMEWORKS EFFECTS IN
●
Accounting for N ACCOUNTING
O
Biological Assets ATI TRANSACTIONS AND
IC
●
Accounting for PL
AP FINANCIAL REPORTING
Patents
●
Accounting
Legislations/
Regulations
Accounting Frameworks
Accounting Frameworks

PAS 41 – Biological Assets

Need for new Accouting standard

for reporting

Need for legislations and

regulations

Patent Law for Genetic Engineering

[Divider
Picture]
Ethical Frameworks
Stakeholder Theory
●
Corporations have some fiduciary duties to
other constituencies…(Velasquez,2006)
Supplier
Custom s
ers
Envmt.
Commu
nity
Busines
s
Employ
ees

Shareh
oldrs Investor
s
Six Pillars of Character

Trustworth
iness
●
Honesty: Truth about genetically made
products.
●
Integrity: Honoring their commitment
to give good service.
●
Reliability: Products work as intended.
●
Loyalty: Loyalty to consumers,
community, and employees first
before the company.
Six Pillars of Character

• Respect: Respect to things that cannot be

touched or manipulated. Responsibility:
Being accountable to the end results of their
product. Being responsible to serve the
customers of their needs.
• Fairness: Leave some resources (natural) for
community use.
• Caring: Being sensitive to what consumers
think about the products.
• Citizenship: Adhering to business applied
laws.
Disclosure
Trustworthiness D
I
Respect S
C
Responsibility L
Stakeholder
Business O
s
Fairness S
U
Caring R
E
Citizenship S
Disclosure

Disclosure
about…
●
Safety of their product
(certifications)
●
Processes done in their products
●
The implications to the
community and the environment
●
Issues faced by the products
(litigations)
PROS and CONS
PROS

Improve nutritional value and rate

of growth of crops

Better flavor of food

Can slow down process of food

spoilage; greater shelf life

Increase seeds’ endurance to harsh

soil and climatic conditions

Can increase medicinal value

PROS

Human genetic engineering can be

used to manipulate certain traits in
a individual

Can enhance positive traits

Can be used to obtain cure for

certain dreaded diseases
CONS

• Can hamper the nutritional value of food

while enhancing their taste and appearance.
• Gene therapy in human beings can manifest
certain side effects
• Can promote the diversity in human beingsIt
is a process of manipulating the nature
• The speed with which science and technology
are advancing is far greater than the speed
with which societies can absorb the changes
they bring about.
CONS

• Risk of genetically altering bacteria so that

they have a greater capacity to cause
disease or resist treatmentRisk of the
possibility that certain infections, treatable
with present-day antibiotics, would be
made resistant to that therapy
• Fragments of foreign DNA introduced into
bacteria may include other genes which has
not yet been identified
Major Ethical Concerns

• Informed
ConsentTruth
Telling
• Resource
Allocation
• Confidentiality
• Sanctity of Life
Effects on Accounting and Financial Reporting
PATENT LAW relating to GENETIC ENGINEERING

Patenting of Encourages Current

biotechnological research, allowing controversy: what
inventions investors to profit is patentable,
becomes popular from their what is not
inventions

Chaturvedi, S. (n.d.). Patents and Biotechnology. Retrieved May 12, 2011, from Jurisnotes:
http://www.jurisnotes.com/IP/articles/patentsbio.htm
PATENT LAW relating to GENETIC ENGINEERING

Generally, invention Still, each country has set

its own standards for
is patentable while a granting
discovery is not. biotechnological patents.

Chaturvedi, S. (n.d.). Patents and Biotechnology. Retrieved May 12, 2011, from Jurisnotes:
http://www.jurisnotes.com/IP/articles/patentsbio.htm
PATENT LAW relating to GENETIC ENGINEERING

Australia USA
-the Australian Patent Act
-the US Patent Law
contained no prohibitions
against patenting of life forms declared living
except for human beings. organisms as inventable.

Chaturvedi, S. (n.d.). Patents and Biotechnology. Retrieved May 12, 2011, from Jurisnotes:
http://www.jurisnotes.com/IP/articles/patentsbio.htm
PATENT LAW relating to GENETIC ENGINEERING

-since then, Unites States Patent Office issued patents for

over 6,000 genes, 1,000 of which related to humans with
20,000 still pending. -US recently issued utility guidelines to
prescribe stricter standards.

Chaturvedi, S. (n.d.). Patents and Biotechnology. Retrieved May 12, 2011, from Jurisnotes:
http://www.jurisnotes.com/IP/articles/patentsbio.htm
PATENT LAW relating to GENETIC ENGINEERING

Europe India
-In its Legal protection of -In Indian patent act,
biotechnological inventions, inventability does not apply
it includes a non-exclusive list to plants and animals.
of non-patentable processes.
-’attack of obviousness’

Chaturvedi, S. (n.d.). Patents and Biotechnology. Retrieved May 12, 2011, from Jurisnotes:
http://www.jurisnotes.com/IP/articles/patentsbio.htm
PATENT LAW relating to GENETIC ENGINEERING

• Common examples of patented biotechnology invention

-genetically-engineered crops.
-potatoes with bacteria genes
-“super” pigs with human growth genes
-fish with cattle growth genes

Center for food safety contributors. (n.d.). Genetic Engineering and Patents. Retrieved May 12, 2011, from Center for
Food Safety: http://www.centerforfoodsafety.org/campaign/save-our-seeds/genetic-engineering-and-patents/
PATENT LAW relating to GENETIC ENGINEERING

With the boom in This is to allow companies

biotechnological inventions,
a need to establish a clear
legal and accounting
framework was needed.
engaged in such businesses
to develop and market
these new products and
processes arising from
genetic engineering.
Biological Asset

Biological asset is a living animal or

plant

●
Entity controls the asset as a result of passt event
●
Probable that future economic benefits associated with
the asset will flow to the entity
●
Fair value or cost of the asset can be measured reliably

An asset shall only recognise a

biological asset when and only
when:
Biological Assets Measurement

• Market price is
based on fair value
less cost to sell
• If there is no
existing market for
such product
compute for the
present value of all
future economic
benefits to be
derived from the
asset
• Cost
Fair Value

• As according to PAS 41
• Quoted price in the market
• Most recent market transaction price
• Market price for similar asset with
adjustment to reflect any differences
• Sector benchmark
• Present value of expected net cash flows
from the asset
Biological Assets Measurement

• If the biological asset is related to an

unconditional grant the biological asset is
measured at its fair value when and only
when the government grant becomes
receivable.
Biological Assets Measurement

• If the government grant related to a

biological asset measured at its fair value is
conditional, where the government grant
requires the entity not to be engaged in a
specified agricultural activity, the entity
will only record it as an income when and
only when the conditions are met.
• Since in the standard, it is
not stated as to how the
asset was created, even if
the asset was not born in
a natural way, it is still
considered as a biological
asset since it is living,
therefore it should be
recorded and carried at
its fair market value
Increasing market share of GE products

• Increasing market
share for products
• Accounting
standard for
reporting
• Cost
classification
• Cost
capitalization
• Costs of
technology
used
• Subsequent
valuation of
technologies
used.
Insufficient Legislation/Regulations

• Proposed Legislation
• require safety testing and labeling of GE crops.
• mandatory environmental impact statements
for every ecosystem into which any new GEO is
to be introduced
• Liability issues:
• responsible for the downstream effects of a
company's product, including damage to organic
producers and damage to the environment.

The Sierra Club Genetic Engineering Committee Report April 2000,

revised March 2001
RECOMMENDATION

Increase laws and regulations

pertaining to genetic engineering

Develop accounting policies that

would show how to account for
GMOs

Do not abuse resources

CONCLUSION

Patenting GMOs is like patenting

life

Ethical clarity and scientific genius

don't always go together