PAS 41 - BIOLOGICAL ASSETS

THEORIES
1. Which of the following is not considered as biological asset?
A. Trees in a plantation forest
B. Land related to agricultural activity
C. Hogs and Poultry
D. Strawberry plants
2. Which of the following is not dealt with by PAS 41on “agriculture”?
A. The accounting of biological assets
B. The initial measurement of agriculture procedure harvested from the entity’s biological assets
C. The processing of agricultural produce after harvesting
D. The accounting treatment of government grants received in respect of biological assets
3. When agricultural produce is harvested, the harvest shall be accounted for by using PAS 2, Inventories,
or another applicable PFRS. For the purpose of that standard, cost at the date of harvest is deemed to be
A. The fair value less costs to sell at the point of harvest
B. The historical cost of the harvest
C. The historical costs less accumulated impairment loss
D. Market value
4. Where there is a long aging or maturation process after harvest, the accounting for such products shall
be dealt with
A. PAS 41, Agriculturesss
B. PAS 2, Inventories
C. PAS 16, Property, plant and equipment
D. PAS 40, Investment property
5. Which one of these is not within the range of activities considered as agricultural activity
A. Capability to change
B. Management of change
C. Production of change
D. Measurement of change
6. All of the following are classified as agricultural produce except
A. Sugar
B. Cotton
C. Milk
D. Wool
7. Which of the following statements regarding biological assets and agricultural produce is(are) true
I. The gain or loss on value change of a biological asset due to price change and physical change is
taken to profit or loss
II. A gain is recognized in statement of comprehensive income when agricultural produce are
harvested, ready for sale.
 III. An entity that owns a mango orchard reports both the land and the fruit trees at fair value as
biological assets.
A. I and III only
B. I and II only
C. II and III only
D. I,II and III
8. Regarding the choce of measurement basis used for valuing biological assets, PAS 41
A. Reccomends the use of current cost
B. Reccomends the use of historical cost
C. Reccomends the use of present value
D. Sets out several ways of measuring fair value
9. An unconditional government grant related to biological asset that has been measured at fair value less
cost to sell shall be recognized as
A. Income when the grant becomes receivable
B. A deferred credit when the grant becomes receivable
C. Income when the grant application has been submitted
D. A deferred credit when the grant has been improved
10. Which of the following is unlikely to be used in fair value measurement
A. Quoted price in market
B. The most recent market transaction price
C. The present value of the expected net cash flows from the asset
D. External independent valuation
11.
 PROBLEM SOLVING

Problem 1
Columbia Company provided the following information about asset in a forest plantation:
Freestanding trees 5,000,000
Land under trees 900,000
Roads in forest 500,000
Animals related to recreational activities 2,000,000
Rubber trees and grape vines 1,500,000

What total amount should be reported as biological asset?

A. 5,000,000 B. 8,500,000 C. 6,500,000 D.9,900,000

Problem 2
The following information pertains to Booba Dairy Ltd. adjusted trial balance at 12/31/2012:
Dairy livestock – immature P 52,060
Dairy livestock – mature 372,990

Determine the amount to be presented under the non-current portion of the statement of financial
position of Booba Dairy for CY 2012.
A. P52,060 B.P372,990 c.C.P425,050 D. P -0-

Solution:
Dairy livestock – immature P 52,060
Dairy livestock – mature 372,990
Total non-current portion P425,050