Biological assets normally Non-current assets
Pas 41: Agriculture: everything relating to agricultural activity
(1) biological assets;;except bearer plants
(2) Agricultural produce at the point of harvest
(3) unconditional government grants related to bio asset
(1) Biological assets are all living animals and living plant as long as it used in
agriculture
Agriculture: is the management of biological assets
FEATURES OF AGRICULTURE
Capability of change Every plant and animals if capable of
biological change (biological
transformation)
1. assets change via
-growth: an increase in quality and in
quantity
-degenerate: a decrease in quality and
quantity
-procreation: creation of animal and plant
2. Production of agricultural produce
(latex, tea, wool)
Management of change Agricultural activity must be managed to
facilitate biological transformation.
Measurement of change The change in quality and quantity can be
measured
Biological assets are classified into
Pas 41, applies to the following WHEN THEY RELATE TO AGRICULTURAL ACTIVITY:
(1) Bio asset; except bearer plants
Ito ang nag seseperate sa plants with dual use
© has the remote likelihood of being sold as a incidental scrap sale/salvage value
(subject sya sa depreciation)
As to consumption
(a) Consumable bio asset- those that harvested to be sold
(b) bearer bio asset- those that are held to bear produce
Additional info: basta kapag related sa agriculture then it can be called bio asset
PLANTS WITH DUAL USE
Reported as bio asset not as a bearer plant
A plant may have dual use if
The plant is cultivated for bearing agricultural produce
The plant itself is being sold either as a living plant or an agricultural produce
(2) Agricultural produce: is a harvested produce of the entity’s bio asset
(3) unconditional government grants related to bio asset
Pas 41 does not apply to the following
(1) land related to agriculture (pas 16)/ppe
(2) bearer plants (pas 16)
(3) government grants related to bearer plants (pas 20)
(4) intangible assets related to agricultural activities (pas 38); good will, patents, etc.
RECOGNITION (3 criteria sa recognition)
An entity shall recognize a biological asset or an agricultural produce when:
(a) the entity controls the assets because of past event
(b) it is probable that future economic benefits associated with the asset will flow to the
entity
(c) the fair or cost of the asset can be measured reliably
Note: PPE (pas 16) and intangible asset (pas 38) recognition nila ay B and C
MEASUREMENT of pas 41
Bio assets General rule
The Initial and subsequent measurement is fair value less cost to sell
ON INITIAL MEASUREMENT CAN BE MEASURE AT CARRYING AMOUNT
FAIR VALUE: price of the active market less transport cost
Hierarchy
Fair value; price active market
Kung maraming market then principal market
If wlang principal market use the most advantageous market
It is the market highest fair value less cost to sell
Agriproduce
Initial: fair value less cost to sell
Subsequent measurement: (pas 2) LCNRV
ENDING BALANCE
Additional info: if nag harvest daw sa consumable tama na yung value
If nag havest sa bearer mag kakaroon ng loss on havest
Bio asset (at carrying amount)
SALES
Problem
