BIOLOGICAL ASSETS

BIOLOGICAL ASSETS 2019, 5 lambs were born. Five 3-year-old sheep

Assets that have life such as plants and animals were sold at their fair value less cost to sell.

1. Agricultural Produce Per unit fair values less cost to sell were as follows:
a. Harvested product from living plants
and animals January 1, 2019
b. Initially recorded at FV-CS at point of 2-year-old sheep 12,000
harvest; LCNRV afterwards since it is Newborn lamb 4,000
now an inventory.
2. Agricultural Acitivity July 1, 2019
a. Management of biological 2-year-old sheep 12,500
transformation (e.g. growth, Newborn lamb 4,500
degeneration, procreation) and
harvest of biological assets December 31, 2019
3. Bearer Plants 2-year-old sheep 13,000
a. Not classified as biological assets, 3-year-old sheep 15,000
but as part of PPE 1-year-old lamb 7,000
b. Remote likelihood of being sold as 0.5-year-old lamb 6,000
the agricultural produce itself Newborn lamb 5,000
c. Supply or produce agricultural
produce aside from itself

INITIAL MEASUREMENT
@ FAIR VALUE LESS COST TO SELL

1. FV-CS < Purchase Price = Expense

2. FV-CS > Purchase Price = Income

SUBSEQUENT MEASUREMENT
@ FAIR VALUE LESS COST TO SELL

1. Change in FV-CS is taken to profit or loss.

2. Change in FV-CS is due to:

Physical Change Price Change

Current Age Previous Age
Different Ages Same Age
Same Date Different Date

EXERCISE
Prepare journal entries and compute
income from change in FV-CS due to
price change and physical change

A flock of twenty 2-year-old sheep was held at

January 1, 2019. On this date, five 2-year-old sheep
were purchased for Php12,000 each. On July 1,