PAS 41 applies to:
1. Biological Assets - living plants and animals.
2. Agricultural produce at the point of harvest - harvested product of biological assets.
Agricultural Activity - management by an entity of the biological transformation and harvest of
biological assets for sale or conversion into agricultural produce or into biological assets.
Biological Transformation:
1. Growth 3. Production
2. Degeneration 4. Procreation
Harvest
- detachment of produce from biological asset.
- cessation of biological asset’s life.
Recognition and measurement:
1. When?
a. Entity has control;
b. Probable inflow of future economic benefit; and
c. Fair value or cost can be measured reliably
2. How?
a. Biological Assets - fair value less cost of disposal.
b. Agricultural Produce - faire value less cost of disposal at point of harvest
Fair value - price that would be received to sell an asset in an orderly transaction between market
participants at the measurement date.
Hierarchy of Fair Value:
1. Price in an active market
2. Most recent market transaction price
3. Benchmarks of prices within the sector
1. Biological Assets - living plants and animals.
2. Agricultural produce at the point of harvest - harvested product of biological assets.
Agricultural Activity - management by an entity of the biological transformation and harvest of
biological assets for sale or conversion into agricultural produce or into biological assets.
Biological Transformation:
1. Growth 3. Production
2. Degeneration 4. Procreation
Harvest
- detachment of produce from biological asset.
- cessation of biological asset’s life.
Recognition and measurement:
1. When?
a. Entity has control;
b. Probable inflow of future economic benefit; and
c. Fair value or cost can be measured reliably
2. How?
a. Biological Assets - fair value less cost of disposal.
b. Agricultural Produce - faire value less cost of disposal at point of harvest
Fair value - price that would be received to sell an asset in an orderly transaction between market
participants at the measurement date.
Hierarchy of Fair Value:
1. Price in an active market
2. Most recent market transaction price
3. Benchmarks of prices within the sector
