Week 2 Agr.pptx - ASSETS PUTEH MARIAM ISMAIL AGRICULTURE...

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AGRICULTURE- BIOLOGICAL ASSETS PUTEH MARIAM ISMAIL
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AGRICULTURE ACCOUNTING FOR BIOLOGICAL ASSETS AND AGRICULTURAL PRODUCE Biological assets includes all living animals or plants. These living animals or plants are used to generate income through harvesting or selling them. These biological assets can transform which lead to different nature and type of biological assets e.g. from calf to cow, from seeds to plants. The transformation would lead to growth, multiplies (procreation), produce and eventually degenerate (old and die). IAS 41 distinguished between types of biological assets comprises of: Consumable: animals/plants which are harvested (not lasting). Bearer: animals/plants bear produce for harvest (lasting to produce more). Normally biological assets will be managed in groups according to class or ratios e.g. cows with males and females.
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INITIAL RECOGNITION OF BIOLOGICAL ASSETS Biological asset should be recognized initially at its cost or fair value if it can be reliably estimated. IAS 41 prescribed that biological assets or agricultural produce should be recognized 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. In practice, the biological assets will be measured based on certain attributes which indicate its potential for probable future economic benefits.
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SUBSEQUENT MEASUREMENT OF BIOLOGICAL ASSETS Biological assets are measured at subsequent reporting dates (i.e. each YE) at fair value less estimated costs at point of sales (point of sales
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