Slide 2 (Scope)

● Will cover biological assets

● Agricultural produce is the fruit or the result of a biological asset.
● Government grants related to biological assets (separate government grant from IAS
20. This grant is related to biological assets)
● This does not include or it will not be applied to the land that the biological asset is in or
attached, intangible assets of the entity, government grants related to bearer plants.
● It does apply to produce growing on bearer plants. The fruit is covered by the standard
and accounted for as agricultural produce. Ex. Apple tree is a bearer plant so it is not a
scope of IAS 41 but rather it is a PPE. But the fruit or the apples from the Apple Tree are
considered and accounted for as agricultural produce and can be applied to IAS 41.

Slide 3 (Key Definitions)

● Biological asset - a living animal or plant that came from agricultural activity. The entity
claiming that they have BA should have performed agricultural activity related to it. Ex.
Floriculture - agricultural activity related to flowers. You can call flowers biological asset.
Aquaculture - if you have a fish pond and acquired biological assets from it then that is
within the scope of IAS 41. Raising livestock - This is biological asset because these are
animals like chicken, goat, cow, pigs, etc. Cropping - Plants. Cabbage and potato.
● You should be actively managing the animal or plant. It should resolve to the so called
biological transformation. As a result of your agricultural activity, the asset is
transforming into a biological asset. (1) growth (2) production (3) procreation (4)
degeneration.
● Animal - May be a bearer (chicken laying eggs) or a consumable (pigs). Plant - May be
bearer (Apple tree, mango tree) or a consumable (Vegetables). The animals that are a
bearer and a consumable are within IAS 41 while a plant that is a consumable is within
IAS 41.
● While a plant that is a bearer is within IAS 16 (PPE) because this plant is unlikely to be
consumed and you are using it for more than one year. Lahat ng bearer plants na
papasok sa definition of a bearer plant in this slide is a PPE.
● Agricultural produce - harvested product from that of the biological asset.
● Costs to sell - directly attributable to the disposal of an asset EXCEPT finance costs,
transportation costs, and income taxes.

Slide 4 (Initial Recognition)

● Recognises a biological asset or an agricultural produce only when the entity controls
the asset as a result of past events. Probable that future econmic benefits will flow to the
entity. FVLCTS can be measured reliably. (IAS 41.10)

Slide 5 (Measurement)
● Biological Asset - FVLCTS initial and subsequent measurement. Unless fair value
cannot be measured reliably then just like IP, you use cost model.
● Agricultural Produce - measured at FVLCTS at the point of harvest. One time mo lang
siya imemeasure. Once you have harvested the apple from the tree, the FVLCTS at that
 time will be the measurement of that apple. Since it will be inventory after harvest which
is within IAS 2. You can always assume that there will be a fair value for the agricultural
produce because the produce is a marketable commodity. There is no measurement
reliability exception. You can always find a market where your product is being sold.
● Changes in FVLCTS for biological asset is also to be reported in profit or loss.

Slide 6 (Measurement cont.)

● Gain on initial recognition. You recognize an asset and your credit is a gain. Physical
increase caused by procreation of your biological assets or growth (laki or dami) then
that is a gain. That is counted as changes in FVLCTS and included in profit or loss.
● Costs related to Biological Assets are expensed EXCEPT Cost to purchase biological
assets.

Slide 7 (Measurement)
● Presumes that fair value can be reliably measured. But if not, BA is measured at cost
less accumulated depreciation and impairment losses until fair value can be reliably
measured.

Slide 8 (Measurement)
● Review IFRS 13 Fair Value Measurement.

Slide 9 (Other issues)

● Encouraged to break down the changes in FVLCTS into physical change (change
because of the biological transformation) and unit price change (you will assume that 1
yr old pig changed its price or FVLCTS).
● Agricultural produce is measured at FVLCTS and this is also considered as its cost.

Slide 10 (Other issues)

● Agricultural Land is PPE and within the scope of IAS 16.
● Intangible assets relating to agricultural activity is accounted for under IAS 38 Intangible
Assets.

Slide 11 (Government Grants)

● Unconditional Government Grants - measured at FVLCTS in P and L when the grant
becomes receivable.
● If grant is conditional then the entity recognizes the grant in P and L only when the
conditions have been met. This is the difference with IAS 20 because in IAS 20 says
that there is already a grant income when there is a reasonable assurance that the
condition will be met.

Slide 12 (Disclosures)
● Read disclosure paragraphs.