Biological Asset Study Notes

AGRICULTURE Bearer Plant PAS 41 Includes PAS 41 Biological Assets Bearer Animals Agricultural Produce at the point of harvest AGRICULTURE The science or practice of farming, including cultivation of the soil for the growing crops and rearing of animals to provide product. Is under PAS 16 (Property, Plant, and Equipment) that uses cost or Revaluation model and is subject to Depreciation. Pas 41 (Agriculture) applies on Agricultural Produce of the bearer plant. Is under PAS 41 (Agriculture) that is measured initially and subsequently at Fair Value less Cost to sell. Animals or plants used in recreational activities are classified under PAS 16. Beyond the point of harvest, agricultural produce that is also processed is governed by the rules of PAS 2 (Inventories). Unconditional Government Grants on Biological Assets PAS 41 Excludes Land on Agricultural Activities Governed by PAS 16 Bearer Plants Governed by PAS 16 Government Grants on bearer plants Governed by PAS 20 Intangible Assets related to Agricultural Activities Governed by PAS 38 Commissions to broker Initial Measurement FAIR VALUE LESS BIOLOGICAL ASSET Are living animals and plants. Subsequent Measurement COST TO SELL Commissions to dealer Levies by regulatory agencies Regular fees Transfer taxes and duties. Classification are those that are to be harvested as agricultural Consumable Biological produce or sold as biological assets. Asset are matured biological assets held for bearing consumable Bearer Biological biological asset to be harvested as agriculture produce. Asset AGRICULTURAL ACTIVITY Is the management of biological transformation of biological assets into agricultural produce. Mature Biological Asset Immature Biological Asset are biological assets that can sustain regular harvest of agricultural produce. are biological assets that are not able to sustain regular harvest of agricultural produce. At the point of harvest, if the Agricultural produce is AGRICULTURAL PRODUCE Detachment or harvest of produce from biological assets Natural State Processed product not yet processed, then the initial measurement is Fair Value less cost to sell. Subsequent to the date of harvest or if the Agricultural produce is processed, then it is treated as Inventory (PAS 2) measured at Lower between Cost and Net realizable Value. Capability to Change AGRICULTURE Management of Change Measurement of Change GROWTH Increase in quality or improvement in quality of an animal or plant. DEGENERATION Decrease in quality or deterioration in quality of an animal or plant. PROCREATION Creation of additional living animals or plants. Agricultural Activity must be managed in enhancing or maintaining the biological transformation of the biological asset. NOTE! Ocean fishing, Deforestation, Hunting in the forest are not Agriculture in PAS 41 The change in quality or quantity by the biological transformation or harvest is measured and monitored. Biological Asset and Agriculture Produce is recognized when: The entity controls the asset as a result of past events. It is probable that future economic benefits will flow to the entity. The fair value or cost of the asset can be measured reliably. NOTE! Cost to Sell excludes Finance Cost, Income Taxes and other costs necessary to bring the asset to the market. GAIN Total Cash outflow for Biological Asset LOSS Total Cash outflow for Biological Asset Initial Recognition Presented in PROFIT or LOSS PRICE CHANGE Changes PHYSICAL CHANGE < Fair Value less Cost to Sell > Fair Value less Cost to Sell