BIOLOGICAL ASSETS - IAS 41 Flashcards
the transformation of biological assets into agricultural produce
the management of agricultural activity
agricultural activity
agriculture
biological asset
living plants and living animals
- related to agriculture
agricultural produce
harvested products of the biological assets
Scope of IAS 41
all biological assets
agri produce at POINT OF HARVEST
Exceptions to the Scope of IAS 41
In my invisible farm, I have a mango tree from the gov.
- bearer plants ( PAS 16) and related
government grants (PAS 20) - intangible assets related to agri act (PAS 38)
- land related to agricultural activity (sakahan) PAS 16
A bearer plant is a ________ plant that is used in the production or supply of _____ expected to bear produce for ____ than one period,
and has a ____ likelihood of being sold as agricultural produce, except for incidental scrap sales.
living
agricultural produce
more than
remote
Features of agriculture
- capability to change (biological transformation)
- management of change
- measurement of change
3 Capability to change- biological transformation
GDP
- growth
- degeneration
- procreation
- production of agri produce
what distinguishes agricultural activity from other activities?
MANAGEMENT OF CHANGE
IKAW ANG DAHILAN NG PAGBABAGO
the change in quality or quantity brought about by biological transformation or harvest is measured and monitored as a routine management function.
MEASUREMENT OF CHANGE
Types of Biological asset
Bio Asset 1. As to Consumption a. Consumable (namamatay or nawawala pag hinarvest) Plant Animal b. Bearer (taga dala) Plant (PAS 16) Animal 2. As to Maturity a. mature b. immature
All animals related to agri activity are biological assets.
All plants related to agri act are biological asset
True
False, bearer plant is under PAS 16
Special considerations on Bearer Plant
- Agri produce still on the bearer plant is still under PAS 41
- DUAL use makes it Biological Asset
- to bear
- to be sold itself
3 Recognition rule for Biological Asset or an agri produce
- control over the asset (unique)
- PROBABLE future economic benefit
- FV or COST can be measured reliably
Initial measurement of Biological asset
rebuttable
FVLCTS
- change is recognized in p/l
- if FV is not available, may use CA or cost then update mo na lang (not applicable to subsequent measurement)
Subsequent measurement of Biological Asset
conclusive
FVLCTS
FV hierarchy
PFRS 13
Level 1
Level 2
Level 3
LEVEL 1
quoted prices in an active market
ACTIVE MARKET
- principal market (greatest volume and level of activity for the asset or liabiltiy)
- most advantageous market (generates the highest proceed in the transaction)
LEVEL 2
observable inputs either directly or indirectly
similar assets in an active market
identical or similar assets in an inactive market
Level 3
unobservable inputs
developed by the entity using best available info
Initial measurement of Agri Produce
conclusive
FVLCTS
*FV is always determinable
Subsequent measurement of Agri Produce
conclusive
LCNRV (if inventory siya)
if PPE
- Cost Model
- Revaluation Model
therefore, depende na kung ano na si agri produce after harvest
pag silent Inventory
Incremental cost directly attributable to the disposal of the an asset,
cost to sell
(TLC)
Transfer taxes and duties
Levies by regulatory bodies
Commission to broker
3 Gain or Loss relating to Agri
p/l
- initial recognition
- change in FV
- Government grant
G/L arising from initial recognition
Biological Assets
Outlay > Initial Measurement = Loss
Outlay < Initial Measurement = Gain
BA……………….xxx
Loss…………….xxx
Cash……………..xxx
Gain………………xxx
Agri Produce from
a. Bearer plant (automatic gain)
Inventory…………..xxx
Gain………………….xxx
b. consumable
Inventory…………..xxx
Loss…………………..xxx
BA………………………….xxx
Gain……………………….xxx
G/L arising on changes in FV
PHYSICAL CHANGE (different age @ 12/31)
End age price @ 12/31
- Beg age price @ 12/31
+ FVLCTS of newborn
PRICE CHANGE (same age, different time)
Beg age price @ 12/31
- Beg age price @ any time
G/L arising from Government Grant
related to agri activity
INCOME
- Unconditional - when receivable
- conditional - conditions were met
- conditional with terms related to time - Straight line
Presentation and Disclosure
Bio Asset
Agri Produce
NCA
CA
Disclosure related to Bio Asset and Agri Produce
Encouraged but not required
- consumable and bearer bio asset
- mature and immature bio asset
- breakdown of total gain or loss in FVLCTS related to PIRCE and PHYSICAL change
Determination of FV
binibili ang bio asset or agri produce sa FARM
Fair Value - transport cost
FV niya sa market (binyahe pa yung bio asset or aagri produce) so ibabawas mo siya kasi pwede naman siya bilhin sa FARM
