Biological Assets
Biological Assets
Biological Assets
BIOLOGICAL ASSETS
Inclusions
PAS 41, applies to the following when they relate to agricultural activity:
1. Biological assets, except bearer plants
2. Agricultural produce at the point of harvest
3. Unconditional government grants related to biological assets
Exclusions
PAS 41 does not apply to the following:
1. Land related to agricultural activity (PAS 16)
2. Bearer plants (PAS 16)
Note: PAS 41 applies on the agricultural produce of bearer plants
3. Government grants related to bearer plants (PAS 20)
4. Intangible assets related to agricultural activity (PAS 38)
As to Consumption
a. Consumable Biological Assets – those that are to be harvested as agricultural produce or sold as biological assets.
b. Bearer Biological Assets – those that are held to bear produce. Only the agricultural produce is harvested while the
biological asset remains.
As to Maturity
a. Mature Biological Assets – are those that have attained harvestable specifications (for consumable biological assets)
or are able to sustain regular harvests (for bearer biological assets)
b. Immature Biological Assets – are those that DO NOT attained harvestable specifications (for consumable biological
assets) or are able to sustain regular harvests (for bearer biological assets)
AGRICULTURE – is the management by an entity of the biological transformation and harvest of biological assets for sale or for
conversion intro agricultural produce or into additional biological assets.
Features of Agriculture
a. Capability to change – living animals and plants are capable to biological transformation.
b. Management of change – the agricultural activity must be “managed” to facilitate biological transformation by
enhancing or atleast stabilizing conditions necessary for the process to take place.
c. Measurement of change – the change in quality or quantity brought about by biological transformation or harvest is
measured and monitored as a routine management function.
MEASUREMENT
a. BIOLOGICAL ASSETS
Initial Measurement: Fair Value – Costs to Sell / Carrying Amount / Cost
Subsequent Measurement: Fair Value – Costs to Sell
b. AGRICULTURAL PRODUCE
Initial Measurement: Fair Value – Costs to Sell
Subsequent Measurement: PAS 2 or other applicable standards
NOTE: In all cases, an entity shall measure agricultural produce at the point of harvest at fair value less cost of
disposal. The initial measurement will be the deemed cost for subsequent accounting using PAS 2 or other
applicable standards.
GAINS OR LOSSES Biological Assets Initial Cash Outflow (Cost) ≠ Initial Measurement (FV – CTS)
a. On Initial Recognition Initial Cost Outflow > Initial Measurement
Bearer Biological Asset
= LOSS
Agricultural Produce
Initial Cash Outflow < Initial Measurement
Consumable Biological = GAIN
Asset
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c. On Government Grant
NOTE: Only government grants related to biological assets are accounted under PAS 41. Government grants of PPE are
accounted under PAS 20. All income from government grants are presented in profit or loss.