IND AS 41 - Agriculture Flashcards
What is the scope of the standard of IND AS 41 and what is considered as an agricultural activity as per the standard?
This Standard shall be applied to account for the following when they relate to agricultural activity:
(a) biological assets;
(b) agricultural produce at the point of harvest; and
(c) government grants
What are the various scope exclusion from the standard on Agriculture as per IND AS 41?
What is the formal definition of Agricultural activity and Biological assets as per IND AS 41 - Agriculture?
a) Agricultural activity refers to 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.
(b) Biological Asset is defined as a living animal or plant.
What is the definition of the term biological transformation as per the provisions of IND AS 41 - Agriculture?
What is the definition of the term bearer plant and how is it different from Agricultural produce covered under IND AS 41?
Bearer plant may be defined as a living plant that:
i. is used in the production or supply of agricultural produce;
ii. is expected to bear produce for more than one period; and
iii. has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.
For example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are outside the scope of Ind AS 41 and covered under Ind AS 16.
However, produce growing on bearer plant is a biological asset.
what are the recognition and measurement principles of Biological Assets in brief for an Agricultural asset as per the requirements of IND AS 41 - Agriculture?
When an Agricultural produce has to be measured and at what value it has to be measured as per INDAS 41?
- Agricultural produce harvested from an entity’s biological assets should be measured at its fair value less costs to sell at the point of harvest.
- Such measurement is the cost at that date when applying Ind AS 2 or another applicable Standard.
- The fair value less cost to sell of a biological asset can change due to both physical changes and price changes in the market.
- Entities often enter into contracts to sell their biological assets or agricultural produce at a future date. Contract prices are not necessarily relevant in measuring fair value.
- As a result, the fair value of a biological asset or agricultural produce is not adjusted because of the existence of a contract.
What are the situations in which the cost may approximate fair value as per the provisions of IND AS 41?
What are the various situations or scenarios where gain/loss from agricultural produce or a biological asset may arise?
What is the treatment of government grant received for a biological asset when it is measured at FV - CTS and also under a scenario where the same is measure at cost as per IND AS 41?
What are the entries that has to be passed for the purposes of Grant under IND AS 20 Under Different Scenarios?
See pg. 101 of FR Shield
