Chapter 8: Agriculture Flashcards
(33 cards)
This means farming or the process of producing crops and raising livestock.
Agriculture
The management by an entity of the biological transformation and harvest of biological assets for sale, including exchange or non-exchange transactions.
Agricultural Activity
Common Features of Agricultural Activities
Capability to Change
Management of Change
Measurement of Change
A feature of agricultural activity where living animals and plants are capable biological transformation.
Capability to Change
A feature of agricultural activity where management facilitates biological transformation by enhancing or at least stabilizing, conditions necessary for the process to take place.
Management of Change
A feature of agricultural activity pertaining to the change in quality or quantity brought about by biological transformation or harvest is measured and monitored.
Measurement of Change
An increase in quantity or improvement in quality of an animal or plant.
Growth
The creation of additional living animals or plants.
Procreation
A decrease in the quantity or deterioration in quality of an animal or plant.
Degeneration
A living animal or plant.
Biological Asset
The harvested product of the entity’s biological assets.
Agricultural Produce
The detachment of produce from a biological asset or the cessation of a biological asset’s life processes.
Harvest
When is a biological asset recognized?
When it meets the asset recognition criteria, including the reliable measurement of its fair value or cost.
Initial Measurement of Biological Assets measured at Fair Value
Fair Value less Costs to Sell
Subsequent Measurement of Biological Assets measured at Fair Value
Fair Value less Costs to Sell
The gain or loss arising from initial measurement and subsequent changes in fair value less costs to sell are recognized in:
Surplus or Deficit
Biological assets whose fair value cannot be reliably determined on initial recognition are initially measured at:
Cost
Subsequent Measurement of Biological Assets measured at Cost
Cost less Accumulated Depreciation and Accumulated Impairment Losses
This is initially measured at fair value less costs to sell at the point of harvest.
Fair Value less Costs to Sell at the POINT OF HARVEST
These are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes.
Costs to Sell
The formula for the Determination of Fair Value
Quoted Price in an Active Market xx
Less: Transport Costs xx
Fair Value xx
If there are more than one active market, the entity shall use:
The price in the market EXPECTED TO BE USED.
Are contract prices relevant when determining fair value?
Naur. It is irrelevant.
This refers to all costs necessary in getting the asset to the market for sale.
Transport Costs
