PAS/IAS 41 Flashcards
(25 cards)
what is PAS/IAS 41
Agriculture
The objective of IAS 41 is to __________________
establish standards of accounting for agricultural activity
the management of the biological transformation of biological assets (living plants and animals) into
agricultural produce (harvested product of the entity’s biological assets).
Agriculture
IAS 41 applies to biological assets with the exception of ____________, _________________, and ______________________. It does not apply to land related to agricultural activity, intangible assets related to agricultural activity, government grants related to bearer plants, and bearer plants. However, it does apply to produce growing on bearer plants.
bearer plants
agricultural produce at the point of harvest
government grants related to these biological assets
A living animal or plant
Bearer plant
The harvested product from biological assets
Agricultural produce
The incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes
Costs to sell
An entity recognizes a biological asset or agriculture produce only when the ________________________________________.
entity controls the asset as a result of past events, it is probable that future economic benefits will flow to the entity, and the fair value or cost of the asset can be measured reliably
Biological assets within the scope of IAS 41 are measured on initial recognition and at subsequent reporting dates at ________________________________.
fair value less estimated costs to sell, unless fair value cannot be reliably measured
Agricultural produce is measured at __________________________t. [IAS 41.13] Because harvested produce is a marketable commodity, there is no ‘measurement reliability’ exception for produce.
fair value less estimated costs to sell at the point of harves
The gain on initial recognition of biological assets at fair value less costs to sell, and changes in fair value less costs to sell of biological assets during a period, are included in _______________.
profit or loss
A gain on initial recognition (e.g. as a result of harvesting) of agricultural produce at fair value less costs to sell are included in ___________________
profit or loss for the period in which it arises
All costs related to biological assets that are measured at fair value are recognized as ______________, other than costs to purchase biological assets.
expenses when incurred
IAS 41 presumes that fair value can be reliably measured for most biological assets. However, that presumption can be rebutted for a biological asset that, at the time it is ________, does not have a quoted market price in an active market and for which alternative fair value measurements are determined to be clearly unreliable. In such a case, the asset is measured at _____________. But the entity must still measure all of its other biological assets at fair value less costs to sell. If circumstances change and fair value becomes reliably measurable, a switch to ____________________.
initially recognized
cost less accumulated depreciation and impairment losses
fair value less costs to sell is required
True or false
The change in fair value of biological assets is part physical change (growth, etc.) and part unit price change. Separate disclosure of the two components is required.
Fale because is it only encouraged, not required.
Agricultural produce is measured at ___________________________
fair value less costs to sell at harvest, and this measurement is considered the cost of the produce at that time
True or false
Agricultural land is not accounted for under IAS 16 Property, Plant and Equipment. However, biological assets (other than bearer plants) that are physically attached to land are measured as biological assets separate from the land. In some cases, the determination of the fair value less costs to sell of the biological asset can be based on the fair value of the combined asset (land, improvements and biological assets). [IAS 41.25]
False because it is accounted
Intangible assets relating to agricultural activity (for example, milk quotas) are accounted for under ________________________.
IAS 38 Intangible Assets.
Unconditional government grants received in respect of biological assets measured at _____________________.
fair value less costs to sell are recognized in profit or loss when the grant becomes receivable
If such a grant is conditional (including where the grant requires an entity not to engage in certain agricultural activity), the entity recognizes the grant in _____________________.
profit or loss only when the conditions have been met
Disclosure requirements in IAS 41 include:
- aggregate gain or loss from the initial recognition of biological assets and agricultural produce and the change in fair value less costs to sell during the period* [IAS 41.40]
- description of an entity’s biological assets, by broad group [IAS 41.41]
- description of the nature of an entity’s activities with each group of biological assets and nonfinancial measures or estimates of physical quantities of output during the period and assets on hand at the end of the period [IAS 41.46]
- information about biological assets whose title is restricted or that are pledged as security [IAS 41.49]
- commitments for development or acquisition of biological assets [IAS 41.49]
- financial risk management strategies [IAS 41.49]
- reconciliation of changes in the carrying amount of biological assets, showing separately changes in value, purchases, sales, harvesting, business combinations, and foreign exchange differences* [IAS 41.50]
True or false
Disclosure of a quantified description of each group of biological assets, distinguishing between consumable and bearer assets or between mature and immature assets, is encouraged but not required.
True
If fair value cannot be measured reliably, additional required disclosures include
- description of the assets
- an explanation of why fair value cannot be reliably measured
- if possible, a range within which fair value is highly likely to lie
- depreciation method
- useful lives or depreciation rates
- gross carrying amount and the accumulated depreciation, beginning and ending.
True or false
If the fair value of biological assets previously measured at cost subsequently becomes available, certain additional disclosures are encouraged but not required.
False- it is required
