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PAS 41 Summary

PAS 41 provides standards for accounting for agricultural activity, including the biological transformation of living plants and animals into agricultural produce or products. It covers the initial recognition and subsequent measurement at fair value less costs to sell of biological assets such as living animals and plants. Gains or losses from changes in fair value less costs to sell during a period are recognized in profit or loss. Detailed disclosures are required including descriptions of biological assets, quantities, fair value measurements, and changes therein.

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192 views2 pages

PAS 41 Summary

PAS 41 provides standards for accounting for agricultural activity, including the biological transformation of living plants and animals into agricultural produce or products. It covers the initial recognition and subsequent measurement at fair value less costs to sell of biological assets such as living animals and plants. Gains or losses from changes in fair value less costs to sell during a period are recognized in profit or loss. Detailed disclosures are required including descriptions of biological assets, quantities, fair value measurements, and changes therein.

Uploaded by

Charles Barcela
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PAS 41 Summary

Objective of PAS 41
The objective of PAS 41 is to set up standards of accounting for agrarian activity – the
administration of the biological change of biological resources (living plants and animals) into
agrarian create (a harvested product of the entity's biological resources).
Scope
PAS 41 applies to biological resources but for bearer plants, agrarian produce at the point of
harvest, and government grants related to these biological resources. It does not apply to land-
related to agrarian movement, intangible resources related to agrarian movement, government
grants related to bearer plants, and bearer plants. In any case, it does apply to produce growing
on bearer plants.
Initial Recognition
An entity recognizes a biological asset or agriculture produce only when the entity controls the
asset as a result of past events, it is probable that future economic benefits will flow to the entity,
and the fair value or cost of the asset can be measured reliably.
Measurement
Biological assets within the scope of IAS 41 are measured on initial recognition and at
subsequent reporting dates at fair value less estimated costs to sell, unless a fair value cannot be
reliably measured.
The gain on initial recognition of biological assets at fair value fewer costs to sell, and changes in
fair value fewer costs to the selling of biological assets during a period, are included in profit or
loss.
If circumstances change and fair value becomes reliably measurable, a switch to fair value with
fewer costs to sell is required.
Other issues
The change in reasonable esteem of natural resources is portion physical alter (development, etc)
and portion unit cost alter. Isolated divulgence of the two components is energized, not required.
Agricultural produce is measured at reasonable esteem fewer costs to offering at gather, and this
estimation is considered the fetched of the item at that time (for the purposes of IAS 2
Inventories or any other appropriate standard).
Agricultural arrive is accounted for beneath IAS 16 Property, Plant, and Hardware. In any case,
organic resources (other than conveyor plants) that are physically connected to arrival are
measured as organic resources isolated from the arrival. In a few cases, the assurance of the
reasonable esteem fewer costs to offer of the organic resource can be based on the reasonable
esteem of the combined resource (arrive, changes, and natural resources).
Government Grants
Unrestricted government grants received in regard to natural resources measured at reasonable
esteem fewer costs to offer are perceived in benefit or misfortune when the allow gets to be
receivable.
In the event that such a allow is conditional (including where the grant requires an entity not to
lock in in certain agrarian action), the entity perceives the allow in benefit or misfortune as it
were when the conditions have been met.
Disclosure
aggregate gain or loss from the initial recognition of biological assets and agricultural produce
and the change in fair value less costs to sell during the period* [IAS 41.40] description of an
entity's biological assets, by broad group [IAS 41.41] description of the nature of an entity's
activities with each group of biological assets and non-financial measures or estimates of
physical quantities of output during the period and assets on hand at the end of the period [IAS
41.46] information about biological assets whose title is restricted or that are pledged as security
[IAS 41.49] commitments for development or acquisition of biological assets [IAS 41.49]
financial risk management strategies [IAS 41.49] reconciliation of changes in the carrying
amount of biological assets, showing separately changes in value, purchases, sales, harvesting,
business combinations, and foreign exchange differences* [IAS 41.50] * Separate and/or
additional disclosures are required where biological assets are measured at cost less accumulated
depreciation [IAS 41.55] Disclosure of a quantified description of each group of biological
assets, distinguishing between consumable and bearer assets or between mature and immature
assets, is encouraged but not required.
[IAS 41.43] If fair value cannot be measured reliably, additional required disclosures include:
[IAS 41.54] description of the assets an explanation of why fair value cannot be reliably
measured if possible, a range within which fair value is highly likely to lie depreciation method
useful lives or depreciation rates gross carrying amount and the accumulated depreciation,
beginning and ending.
If the fair value of biological assets previously measured at cost subsequently becomes available,
certain additional disclosures are required.
[IAS 41.56] Disclosures relating to government grants include the nature and extent of grants,
unfulfilled conditions, and significant decreases expected in the level of grants.

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