Ch. 7 - Agriculture

Question 1

biological asset or agricultural produce - Recognition Criteria

Answer 1

1. the entity controls the asset as a result of past events
2. it is probable economic benefits will flow to the entity
3. the FV or cost of the asset can be measured reliably

Question 2

Initial Measurement - Biological Assets

Answer 2

• measured at fair value less costs to sell (fair value at date, not what it could grow in to)

Question 3

Initial Measurement - Agricultural Produce

Answer 3

• measured at fair value less costs to sell

Question 4

What is a biological asset:

Answer 4

a living thing:

1. consumable biological assets (plants to eat or cow to eat)
2. bearer biological assets (except for bearer plants) (trees for lumber or cows for cheese or sheep for wool)

Question 5

What is agricultural produce:

Answer 5

the product obtained from the living thing (the wool from sheep or the milk from cows)

Question 6

Bearer plants - Criteria

Answer 6

1. used in the production or supply of agricultural produce
2. expected to produce for more than one period
3. a remote likelihood of being sold as agricultural produce themselves

Question 7

Ongoing Measurement - Biological Assets

Answer 7

• fair value less costs to sell, with gains/losses to net income

Question 8

Ongoing Measurement - Agricultural Produce

Answer 8

• agricultural produce becomes inventory, and is measured at lower of cost and NRV

Question 9

Government Grants in Agriculture - recognition

Answer 9

grants are recorded in income at the time it becomes receivable and conditions have been met

Question 10

Agriculture - IAS #

Answer 10

41