FR 7 - Agriculture

Question 1

Are bearer plants included under IAS 41?

Answer 1

No, covered under IAS 16

Question 2

Criteria for bearer plants

Answer 2

used in production or supply of agricultural produce
expected to produce for more than one period
have a remote likelihood of themselves being sold as produce

Question 3

Criteria for recognizing biological assets or produce

Answer 3

• entity controls the asset as result of past events
• probable that future economic benefits associated with asset will flow to the entity
• FV or cost can be measured reliably

Question 4

Measurement of biological assets

Answer 4

FV less costs to sell

Question 5

If FV not determinable, how are assets measured?

Answer 5

cost less acc dep

Question 6

Measurement of agricultural produce

Answer 6

FV less costs to sell. eggs of laying hens measured as inventory at the FV of eggs less costs to sell

Question 7

Ongoing measurement - biological assets

Answer 7

FV less cost to sell - updated each reporting period. gains/losses reported in income

Question 8

Ongoing measurement - agricultural produce

Answer 8

Once harvested, treated as inventory. Initial measurement treated as cost of inventory, future measurement lower of cost or NRV
Gains/losses - recognized in income statement

Question 9

Government grants treatement

Answer 9

Income, unless specific conditions, then recognized as acheived