IAS 41: Agriculture (Biological Assets)

● Biological Asset - these are actually the living animals and living plants
○ Only living animals and plants that are related to the agricultural activity of the
company are to be considered or related.

● Agricultural Produce - the harvested product of an entity’s biological asset (ito yung
mga product na nakukuha sa biological assets - if we have mango plantations, kapag
namunga at pinitas mo na yung mangga na yun, ito na yung agricultural produce)

● Harvest - the detachment of produce, right from a biological asset or the cessation of a
biological assets processes

APPLICABLE STANDARDS

→ IAS 41: Agriculture - ginagamit lang ito at the point of harvest

→ IAS 2: Inventories - ginagamit ito after harvest ( the company is actually engaged into
agricultural activity, see to it the benefit na makukuha nila sa mga produce nila tapos ib-benta
nila ito) → Lower of Cost or Net Realizable Value (LCNRV)
Recognition of Biological Assets

1. The entity controls the asset as a result of past events.

● Past event → acquisition of biological assets

2. It is probable that future economic benefits associated with the asset will flow to the
entity

3. The Fair Value or Cost of the asset can be measured reliably.

Initial and Subsequent Measurement of the Biological Assets

Same lang ang measurement → Fair Value less (-) cost to sell
→ Incremental Cost directly attributable to
the disposal of the asset
→ Commissions (brokers)
→ Taxes (Transfer tax and import duties)

→ Not part (Expensed Outright)

1. Transport cost
2. Finance Cost
3. Income Tax
● Possible na may changes in FV → Recognize as Gain or Loss (P/L)
Hiwalay sila im-measure at ip-present sa balance sheet
If no separate market exist → FV of trees will be the residual amount = Fair Value of combine
Asset (-) Fair Value of the asset (Land)

Animal - related to recreational activities

→ Game parks or Zoos

→ Ginamit pang display or entertainment
→ These are not Biological Asset
→ IAS 16

Bearer Plants

→ These are the plants used solely to grow to produce over several periods over their
productive lives.

→ IAS 41 and IAS 16 - is a living plant that:

a. Is used in the production or supply of agricultural produce –inventories
b. Is expected to bear produce for more than one period
c. has a remote likelihood of being sold as agricultural produce
except for incidental scrap sales. (hindi ine-expect na mabenta even
at the end of their useful life)
→ Hindi applicable yung IAS 41
→ IAS 16 (PPE) considered as equipment ito, ito yung ginagamit na mga bagay para
makapag produce ng inventories.
→ Nagd-depreciate (Depreciation Expense every year) mature
→ Depreciation will commence only if the PPE is already available for use.

Presentation of Biological Assets or Agricultural Produce

→ Current
Within 12 months pwede mo na i-harvest
Livestock - chickens (Slutter or kinakatay)

→ Noncurrent
More than 12 months bago mo pwede i-harvest
Livestock - chickens (held for breeding purposes only at hindi ib-benta)