IAS 41 Agriculture prescribes the accounting treatment, financial statement presentation, and disclosures related to agricultural activity. Agricultural activity is the management of the biological transformation of biological assets (living animals or plants) and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets.
IAS 41 Agriculture establishes the accounting treatment for biological assets during their growth, degeneration, production and procreation, and for the initial measurement of agricultural produce at the point of harvest. It does not deal with processing of agricultural produce after harvest (for example, processing grapes into wine, or wool into yarn). IAS 41 Agriculture contains the following accounting requirements:
bearer plants are accounted for using IAS 16 Property, Plant & Equipment; other biological assets are measured at fair value less costs to sell; agricultural produce at the point of harvest is also measured at fair value less costs to sell;
changes in the fair value of biological assets are included in profit or loss; and biological assets attached to land (for example, trees in a plantation forest) are measured separately from the land. The fair value of a biological asset or agricultural produce is its market price less any costs to sell the produce. Costs to sell include commissions, levies, and transfer taxes and duties.
IAS 41 Agriculture differs from IAS 20 Accounting for Government Grants & Assistance with regard to recognition of government grants. Unconditional grants related to biological assets measured at fair value less costs to sell are recognized as income when the grant becomes receivable. Conditional grants are recognized as income only when the conditions attaching to the grant are met.
IAS 41 Agriculture is Copyright: IFRS Foundation
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