ICMA financial statement presentation IAS 41 Agriculture Objective Recognition criteria

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					                                                              IAS 41 Agriculture

Objective:  -Recognition criteria                 -Measurement          criteria       - Calculation and treatment of G/L on re-
            -Measuring Assets                     -Government Grants

Scope:          Biological Assets       +      Agricultural Produce                           +      Government Grants
                Not Applicable on       land and IA related to agricultural activity          +      Post harvest produce


Agricultural activity is the management by an enterprise of the biological transformation of biological assets

       for sale,
       into agricultural produce, or
       into additional biological assets

                                   Capability + Management + Measurement               of change
  Does NOT include, e.g. open ocean fishing, greyhounds, horses etc held for racing, animals in zoo, viruses/blood cells for research

Agricultural produce is the harvested product of the enterprise´s biological assets.

A biological asset is a living animal or plant.

Biological transformation comprises the processes of growth, degeneration, production, and procreation that cause qualitative or
quantitative changes in a biological asset.

A group of biological assets is an aggregation of similar living animals or plants.

Harvest is the detachment of produce from a biological asset or the cessation of a biological asset´s life processes.

                                                   Biological Asset or Agricultural Produce == Intended Use

                                                                           RECOGNITION CRITERIA
Land on which a vineyard is situated
                                                   Recognize a BA or AP when, and only when, all three of the following are
A sheep kept to breed more sheep                   fulfilled
Grapes on the vine                                  Control as a result of Past Event
                                                    FEB are probable to flow to the enterprise
Wool sheared from the sheep                         Fair Value or Cost can be determined reliably
Wool on the sheep
Grapes picked from the vine                                    AP and BA should be measure as WHOLE before harvesting
                                               MEASUREMENT CRITERIA
                             Biological Asset                                   Agriculture Produce
           On initial recognition and at each BS date              At the time of harvest from BA, measure AP
           At FV less estimated point of sale cost                 At FV less estimated point of sale cost

        Except* where FV can’t be determined
        In that case BA is measured at Cost-Acc. Dep – Acc. IL

Fair Value                                                           POS cost
 Present Location & Condition, excluding transportation costs        Commission to broker, levies, taxes, duties
 Contract Prices are NOT relevant                                    Does NOT include transport and other costs

                                        Effect of change in FVs and Journal Entries
               BA at FV, Effect of AP (before harvesting) on FV, harvesting- recording of AP & effect on BA

* where all four of the following conditions are fulfilled
    There is not market value (active market)
    There is no recent market transaction price
    There are no similar assets with which to compare the price
    There are no sector/industry benchmarks against to compare

                                          GOVERNMENT GRANTS
                     Conditional                                     Unconditional
Recognize as income when, and only when,           Recognize as income when, and only when,
Conditions attaching to the GG have been met       The GG becomes receivable

                 GG relating to BA measured at Cost-Acc Dep& Acc IL is covered under IAS 20

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