PAS 41 - PAS 41 AGRICULTURE MODULEOBJECTIVES Define...

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PAS 41 AGRICULTURE
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MODULE OBJECTIVES Define biological assets and agricultural produce Initially measure and recognize biological assets and agricultural produce Account for changes in biological assets Present biological assets on the financial statements Identify required disclosures relating to agricultural activity
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SCOPE OF PAS 41 Applies to accounting for Biological assets Agricultural produce, only at the point of harvest Government grants related to biological assets measured at fair value less estimated point of sale costs
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EXCEPTIONS PAS 41 does not apply to Land related to agricultural activity Intangible assets related to agricultural activity Government grants of biological assets measured at cost less accumulated depreciation and impairment loss.
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Dried mango factory
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Biological assets are living plants and animals.
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Key Definition Agricultural activity is the management by an entity of the biological transformation of biological assets for sale, into agricultural produce, or into additional biological assets. Agricultural produce is the harvested product of the entity’s biological assets. A biological asset is a living animal or plant. Biological transformation comprises the processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in biological asset. A group of biological assets is an aggregation of similar living animals or plants. Harvest is the detachment of produce from a biological asset or the cessation of a biological asset’s life processes.
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Coverage of Agricultural Activity Covers a diverse range of activities. Examples: Raising livestock, Forestry, Annual perennial cropping, Cultivating orchards and plantations, Floriculture, and Aquaculture (including fish farming) Common features Capability to change . Living animals and plants are capable of biological transformation. Management of change . Management facilitates biological transformation by enhancing, or at least stabilizing, conditions necessary for the process to take place (for example, nutrient levels, moisture, temperature, fertility, and light); and Measurement of change . The change is quality or quantity brought about by biological transformation is measured and monitored as a routine management function.
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An entity recognizes a biological asset when a. The enterprise controls the asset as a result of past event b. It is probable that future economic benefits will flow to the entity. c. The fair value or cost should be measured reliably. A biological asset should be measured initially and at each balance sheet date at its fair value less estimated point-of-sale costs. Exception is where the fair value cannot be measured reliably.
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PAS 41 - PAS 41 AGRICULTURE MODULEOBJECTIVES Define...

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