IAS 41 Agriculture (Biological Assets) Flashcards
The standard should be applied to account for what activities related to agriculture?
biological assets, except bearer plants ; agricultural produce at the point of harvest ; and government grants covered by paragraphs 34 and 35
The standard does not apply to?
land related to agricultural activity ; bearer plants related to agricultural activity ; government grants related to bearer plants ; intangible assets related to agricultural activity ; right-of-use assets arising from a lease of land related to agricultural activity
It is the harvested produce of the entity’s biological assets
Agricultural Produce
After harvest point, is the agricultural produce still under biological assets?
No. After the harvest point of the agricultural produce, IAS 2 Inventories or applicable other standards is applied.
Sheep - Wool
Pigs - ?
Carcass
Dairy cattle - milk
Rubber trees - ?
Harvested latex
The management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets
Agricultural activity
Used in the production or supply of agricultural produce
Bearer Plant
A living plant or animal
Biological Asset
The incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes
Cost to sell
The detachment of produce from a biological asset or the cessation of a biological asset’s life processes
Harvest
Comprises the processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset
Biological Transformation
An aggregation of similar living animals or plants
Group of biological assets
Is a produce growing on bearer plants a biological asset?
Yes
The amount at which an asset is recognized in the statement of financial position
Carrying amount
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
Fair Value
A biological asset is recognized when, and only when?
entity controls the asset as a result of past events ; it is probable that future economic benefits associated with the asset will flow to the entity ; and the fair value or cost of the asset can be measured reliably
When should a biological asset be measured?
On initial recognition and at the end of each reporting period at its fair value less cost to sell
How should an agricultural produce harvested from an entity’s biological assets be measured?
At its fair value less cost to sell at the point of harvest
Should the FV of a biological asset or agricultural produce be adjusted due to the existence of a contract?
No, contract prices are not necessarily relevant in measuring fair value.
When shall the fair value less cost to sell be recognized in profit or loss on unconditional government grants?
When the government grant becomes receivable
If a government grant related to a biological asset measured at its FV less cost to sell is conditional, when should the entity recognize the government grant profit or loss?
When, and only when, the conditions attaching to the government grant are met
May an entity skip on the disclosure on the aggregate gain or loss arising during the current period?
No, an entity shall disclose the aggregate gain or loss.
What comprises the Biological transformation?
Growth, degeneration, production, and procreation
The increase in quantity or improvement in quality of an animal or plant
Growth
The creation of additional living animals or plants
Procreation
Decrease in the quality or detoriation in quality of an animal or plant
Degeneration
The management by an entity of the biological transformation and harvest of biological assets for sale or for conversion intro agricultural produce or into additional biological assets
Agricultural activity
What is the type of asset of a living animal or plant?
Biological Asset
Is unprocessed harvested produce under IAS 41?
Yes, it is an agricultural produce
Is a processed product under IAS 41?
No, it is under IAS 2 Inventory
Assuming an animal classified as a biological asset is purchased and the purchase price exceeds its fair value less estimated cost to sell, the pro-forma entry is:
Dr Biological Asset (at FV less cost to sell)
Dr Expense (at initial recognition of biological asset)
Cr Cash
When an animal is born, the pro-forma entry is:
Dr Biological Asset (At FV less cost to sell)
Cr Income - changes in fair value of biological asset
