Agriculture and inventories

Question 1

What is the definition of a biological asset according to IAS41 Agriculture?

Answer 1

A living plant or animal

Question 2

What is the definition of agricultural produce according to IAS41 Agriculture?

Answer 2

Produce harvested from a biological asset

Question 3

How do you recognise agricultural grants?

Answer 3

in SPL when conditions are met

Question 4

How do you recognise biological assets?

Answer 4

Initially at fair value less costs to sell
At year end - revalue to fair value less costs to sell. If fair value not available then measure at cost less depreciation
Gain or loss to SPL

Question 5

How do you recognise agricultural produce?

Answer 5

Initially at fair value less costs to sell
Immediately reclassify as inventories

Question 6

As per IAS2 Inventories, how do you recognise inventory?

Answer 6

Lower of;
Net realisable value (expected selling price less expected costs to sell)
Cost (Actual/Average/FIFO)

Question 7

How are bearer plants recognised? (plants that bear produce for more than one period e.g. tea bushes, apple trees, grape vines, oil palms and rubber trees)

Answer 7

Under IAS16 PPE