IAS 41 Agriculture (Biological Assets)

Question 1

The standard should be applied to account for what activities related to agriculture?

Answer 1

biological assets, except bearer plants ; agricultural produce at the point of harvest ; and government grants covered by paragraphs 34 and 35

Question 2

The standard does not apply to?

Answer 2

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

Question 3

It is the harvested produce of the entity’s biological assets

Answer 3

Agricultural Produce

Question 4

After harvest point, is the agricultural produce still under biological assets?

Answer 4

No. After the harvest point of the agricultural produce, IAS 2 Inventories or applicable other standards is applied.

Question 5

Sheep - Wool
Pigs - ?

Answer 5

Carcass

Question 6

Dairy cattle - milk
Rubber trees - ?

Answer 6

Harvested latex

Question 7

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

Answer 7

Agricultural activity

Question 8

Used in the production or supply of agricultural produce

Answer 8

Bearer Plant

Question 9

A living plant or animal

Answer 9

Biological Asset

Question 10

The incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes

Answer 10

Cost to sell

Question 11

The detachment of produce from a biological asset or the cessation of a biological asset’s life processes

Answer 11

Harvest

Question 12

Comprises the processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset

Answer 12

Biological Transformation

Question 13

An aggregation of similar living animals or plants

Answer 13

Group of biological assets

Question 14

Is a produce growing on bearer plants a biological asset?

Answer 14

Yes

Question 15

The amount at which an asset is recognized in the statement of financial position

Answer 15

Carrying amount

Question 16

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

Answer 16

Fair Value

Question 17

A biological asset is recognized when, and only when?

Answer 17

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

Question 18

When should a biological asset be measured?

Answer 18

On initial recognition and at the end of each reporting period at its fair value less cost to sell

Question 19

How should an agricultural produce harvested from an entity’s biological assets be measured?

Answer 19

At its fair value less cost to sell at the point of harvest

Question 20

Should the FV of a biological asset or agricultural produce be adjusted due to the existence of a contract?

Answer 20

No, contract prices are not necessarily relevant in measuring fair value.

Question 21

When shall the fair value less cost to sell be recognized in profit or loss on unconditional government grants?

Answer 21

When the government grant becomes receivable

Question 22

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?

Answer 22

When, and only when, the conditions attaching to the government grant are met

Question 23

May an entity skip on the disclosure on the aggregate gain or loss arising during the current period?

Answer 23

No, an entity shall disclose the aggregate gain or loss.

Question 24

What comprises the Biological transformation?

Answer 24

Growth, degeneration, production, and procreation

Question 25

The increase in quantity or improvement in quality of an animal or plant

Answer 25

Growth

Question 26

The creation of additional living animals or plants

Answer 26

Procreation

Question 27

Decrease in the quality or detoriation in quality of an animal or plant

Answer 27

Degeneration

Question 28

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

Answer 28

Agricultural activity

Question 29

What is the type of asset of a living animal or plant?

Answer 29

Biological Asset

Question 30

Is unprocessed harvested produce under IAS 41?

Answer 30

Yes, it is an agricultural produce

Question 31

Is a processed product under IAS 41?

Answer 31

No, it is under IAS 2 Inventory

Question 32

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:

Answer 32

Dr Biological Asset (at FV less cost to sell)
Dr Expense (at initial recognition of biological asset)
Cr Cash

Question 33

When an animal is born, the pro-forma entry is:

Answer 33

Dr Biological Asset (At FV less cost to sell)
Cr Income - changes in fair value of biological asset