It is clear that the piglets meant for sale are biological assets but are the sows which are not meant for sale, be considered as bearer plants and treated under IAS 16? How to measure the value of puppy? If it is still on the palm tree, then you would show the palm tree only. thank you silvia you know the IFRS like the palm of your hand,,,,,this information is very useful, A beautiful piece of work that is relevant in our worlds developing countries. Hi Neneyo, no, sows are not bearer plants, because they are not plants – they are animals. Miriam, If the activity involves whereby biological assets are transformed into another additional biological asset e.g. A lot of examples are given for understanding the topics. A killer was sentenced to death. Agriculture (IAS 41) Chapter 11. 1.9 Is the growing of plants to be used in the production of drugs an activity within the scope of IAS 41? UPSC IAS 2020: Check here most important questions on Current Affairs with answers which are likely to be asked in UPSC Civil Services IAS Prelims 2020 … Having that, we appreciate your tremendous work always which is freely available. Hi Silvia I plan to cover it in the future in some of my next articles. That allows you to use cost less depreciation. Section 2 Paper No: IAS 41 then deals with gains and losses, inability to measure fair value reliably, provides rules for government grants related to biological assets. This is straight and simple. It is the management of the biological transformation (e.g. Thank you for the article on this important issue. Harvest is the detachment of produce from a biological asset or the cessation of a biological asset’s life processes. IAS 37 - Provisions, Contingent Liabilities and Contingent Assets (18) IAS 38 - Intangible Assets (25) IAS 39 - Financial Instruments: Recognition and Measurement (34) IAS 40 - Investment Property (21) IAS 41 - Agriculture (7) US GAAP Accounting Discussion (12) General Accounting Discussion (21) Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. So, if you’re into agricultural business, or you just need to familiarize yourself, keep on reading. I just have one question if you don’t mind. I think this podcast episode will give you the answer. This article is very helpful, concise and explicit in gaining further understanding. it has been short period that I am following your enriched lectures having read this I wanna ask how would be accounting treatment at cost initially (will it be going SOFP Dr/Cr) and then FV (SOFP Dr and PL Cr). IAS 41 requires number of disclosures. Is it allowed in IAS 41 and If we moved is it change in accounting policy or accounting estimate. need solution for the flowing question and forward solution on the following e-mail awaisanwar1988@gmail.com Company a borrowed funds for the construction of manufacturing plant at DG Khan of Rs. PART I Section 1 Paper No: CA11 Financial Accounting Past Papers CA12 Business Law Past Papers CA13 Entrepreneurship and Communication Past Papers. Fantastic and very, very positive. It is an agri business and they are biological assets but the biological transformation doesn’t relate to the dog or horse but to the sheep or cattle. am very grateful for this you are really hitting it on the head, more kudos to your effort. Looking foward to your next article, have a client who is involve in fishing. Whether to apply IAS 2 or IAS 41 for Puppies? However, the question is whether this is agricultural activity or not. the company doesnt allocate any cost into mother plant(although they do need water and fertilizer to grow). Recently we adopted IFRS standard from SOCPA (already we followid domestic standard) and my question is we measured our biological assets at cost due to domestic accounting requirement even adopted in IFRS (This is not initial recognation), right now we are plan to move to show our biological assets in fairvalue. Financial instruments (IFRS 9) Chapter 12. But if there’s someone wishing to help… then I would do it , thank you for an informative lecture. Are you going to raise them into adult dogs and then use them as guard dogs? Some companies do as you described, but some of them add to the carrying amount and then treat all the change as the fair value change – for me, the second approach is more appropriate, because unarguably the fair value change includes the change caused by feeding and staff working. It is also likely not to be material. Hello Silvia,I must say you are an awesome teacher.The simplicity in your explanations is really amazing.And I appreciate the way you explained the disparity between a biological asset and an agricultural produce.I definitely will get your IFRS kits anytime soon. costs are assumed to be immaterial. Shown three rooms. Thank you in advance! 036: Contract asset vs. account receivable. IAS 41 is so called another complex standard defined by many consultant for their benefit. Thanks a lot Sylvia for this! Picking and packaging costs amount to $25000. Subsequently it should be measured at the lower of cost or NRV according to the requirement of LKAS 02. That was explained in its best possible way. By definition, living animals and plants are born, grow and die. In 2015, ABC Limited established and commenced operation of an Flower business in Suva. 150 millions from MCB bank dated 1-1-2014 for 3 years period @ 12% pa. Construction was completed on 30th June 2015. I don’t however understand the basis of moving only bearer plants from IAS 41. there are also bearer animals and I believe that in most cases it may be impracticable to fair value them(my opinion though). Thanks a lot for putting these together. Well, puppies are living animal, basically you measure them at fair value less costs to sell. Imagine you have a dog. Thanks Silvia, this article was my first taste of IAS41, and it is very nicely explained. Based on my understanding of this article, our horses should be classified as follows: * race horses – a PPE and should be accounted at cost and to be depreciated (IAS 16) So, you capitalize all the costs and then you depreciate the plant. God bless, Thank you lot for updating us for every IFRS. Am sure they are getting it wrong at the moment. Or, do you have that dog in order to produce and raise puppies and sell the puppies? Please check your inbox to confirm your subscription. In many developing countries, agricultural activities represent one of the most important sources of income. now the company doesn’t show the mother plants in the ledger at all(the quantify of those plants are small compared with the plants will be used for harvesting though). Let me call you the “Qween of IFRS” ! Well, I would need someone to help me moderate the forum and respond the questions, because I just can’t do it myself, it’s a huge workload S. Folks All Rights Reserved. IAS 41 Agriculture 2017 - 07 2 Costs to sell are the incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes. Dr Inventory Can you please clarify, in what situation loss can arise on initial recognition of biological asset. And more over,this less examined in most Financial reporting questions.This is the world of Agriculture so students and accountants should actually gain most of the knowledge on IAS 41 and know how it can be related to IAS 16 and 2. However, you must prepare well predicting all the possible questions to be asked from all related aspects in your DAF. I am currently working in a horse breeding and racing business. That is related to IFRS 15 (contract with customers). Thank you a lot. A bearer plant is a living plant used in production or supply of agricultural produce that is expected to produce for more than 1 period. The first room is on fire second guns with the … Chapter 19. Tendani, guard dogs in most cases meet both of these criteria. Hi. The definition is: “Agricultural activity is the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets.” Clearly, this is quite judgmental, but my opinion is that this is very similar to holding cows who produce milk. How about the male horses that provides coverings to female horses (owned by other owners)? I am not working in this field but i think it,s very interesting standard I’m working in a company that have the initial growth in a 17-year pine Cupressaceae plantation production cycle. At the moment of harvest, you should measure your new inventories at their fair value less costs to sell and subsequently, you measure them under IAS 2 at lower of cost and net realizable value. We generate a revenue from this through the service fees. Oh no no and no. Surplus funds were invested @8% pa. what is the practice with this situations. Note: depreciation cannot be calculated in this question as Silvia. I would like to know if it’ll be incorrect for a zoo to apply IAS 40 for animals in the zoo, since they are used to generate income. With a little tweak you have laid bare the matter. Harvest is the detachment of produce from a biological asset or the cessation of a biological asset’s life processes. Events after the reporting date (IAS 10) Chapter 15. planted in 2007, and began producing saleable flowers in 2016. Please copy me on my email albertmkongwa@gmail.com. Is it a guard dog, protecting your property and barking at everyone passing by? When the fair value cannot be measurable, you can measure the asset at its cost less accumulated depreciation. She said either PPE or another, i think that is IAS41. Btw, i have some question. What is the best method to measure the cost of this? If the agricultural produce is still attached to the bearer plant (e.g. Actually Silvia, he can’t add the cost of raising the puppies to the puppies !!! UPSC conducted the UPSC Civil Services IAS Prelims CSAT in the evening session on 3rd June 2018. Agricultural activity is the management by an entity of the biological transformation (the process of growing, degenerating, production and procreating that causes qualitative or quantitative change in the biological asset. Test yourself with questions about B7g. I rarely publish articles about specific sectors, but this time, I decided to make an exception. Hi Rose, well, I have no idea what standards you are referring to, because this site is about IFRS. In the pig farming business, one has a dedicated number of specially selected sows to produce piglets. IFRS® is the IFRS Foundation’s registered Trade Mark and is used by Simlogic, s.r.o We have a rose farm and after planting there are fertilizers and chemical costs along with labor until the first harvest comes out after nine month. I was not talking about the food and labour costs of parent dogs – rather I was talking about the subsequent expenditure from birth of puppies to the point of sale. Hi Sylvia and thank you so much for this perfect article, my questions is, how can we treat the raised puppies? UPSC IAS Interview Questions And Answers: IAS Interview is the last and final stage to crack. Question 3d - June 2016 Sample. The harvested products of biological assets are agricultural produce. UPSC IAS 2020: Check here most important questions on Current Affairs with answers which are likely to be asked in UPSC Civil Services IAS Prelims 2020 exam that will … 1 answer. General Studies Paper I. Click on the subject title to open then Download in the new page or open the subject title as a new tab. NEW: Online Workshops – US GAAP, IFRS and other, this podcast episode will give you the answer. Selling Please advice me to be a good professional people in Business field as well as a good farmer. As for the rental, it depends on whether the company applies new lease standard IFRS 16 or the older IAS 17. Hope this communication will continue in future. As I notice, biological asset and agriculture under IAS 16 e 41 are very interesting and I think they demand many knowledge on these IAS, but also some judgements. In this article, I outlined just a few critical questions related to the correct reporting of agricultural activities. Add them to the cost of puppies. The first and primary question when dealing with living plants and animals is – what is agricultural activity? thanks silvia , really from all my heart you are an amazing doctor ……. Also check- Spark interview questions / Teacher Interview questions Kerala Psc Questions And Answers 1. Hi Silva, I enjoyed reading your post about IFRS, you simplified it in a simpler form. Free IAS 40 multiple choice quiz. So to my understanding a company whose business is in Fish Farming (buys small fish , places them in fish pens, feed them and then when they reach the desirable/saleable size they are harvested and sold) , then IAS 41 applies. How can i recognize the accumulated cost of Young coffee if young coffee died before bearing first fruit?? My question is what is the journal entry if you capitalise a new baby animal under 41? Hi Carlos, Hi Mira, it depends whether the “greenery services” maintain the area, or actually enhance it. A comprehensive database of more than 22 genius quizzes online, test your knowledge with genius quiz questions. I’ve explained it above – guard dogs, fish caught in the ocean, etc. On a magical-intellectual land of gpuzzles , all the animal are … I am eagerly looking forward to your next article. Eyad, I don’t know because I have never had any. Can you please give more vivid examples that differentiate the two Biological Assets – Plant type to be treated under IAS 41 vS IAS 16, Hi Albert – this is the right question on the right time! Please 2 cows died from the flock of 23 cows we rear for reproduction. S. Well educate.am actaully interested to know more about this study,most chartered accountants over look this standard and as a result we have little understanding about it. The trees were Hi Jane, well, this needs to be carefully assessed, but look to IAS 11 Joint arrangements (it can apply), or even simple barter transactions can apply. Thank you Silvia for your article on IAS 41. Pls let us know how best I can help you for future projects. Silva, Really you are amazing. what “box” do you mean? I have learnt so much from you since I started reading your articles. Hi Sylvia, may I know how to account for dairy cattle, is It under MFRS 114 OR MFRS 116? IAS 10 Events After The Reporting Period from past papers in ACCA FR (F7). ... D IAS 41 Agriculture. Yes, animals living in the ZOO sometimes pair and produce a baby – but if it’s a natural process, not managed by the ZOO, it is NOT an agricultural activity. You should separately report what change was caused by the change in prices and change in physical quantities. However we have neither primary nor secondary market for Grape. This is a great question. You are really special regarding IFRS. Reveal answer. I sincerely appreciate the lesson. How should we treat these costs. Hello Sylvia Thank you very much for this fantastic ariticle. Careful – this is only about plants, not animals. Measuring that dog Under IAS 16 could also be a challenge. Thank you, Dear Sylvia, Good morning from Greece, S. Thank you Silvia. It is the management of the biological transformation (e.g. My next article will be about it, so please watch out , Dear Silvia, Thanks for your response. Why? Awesome article Silvia! Thank you for this article. Ask a question: Recent questions and answers in IAS 41 - Agriculture 1 answer. Hi Tonka, then I’m glad to open your mind a bit and help . Reveal answer. Multiple Choice Questions for IAS Prelims 2020-2021. ending 30th June 2017, employee expenses, fertilizers, lease expense and other expenses amount to Marking guide. Income taxes (IAS 12) Chapter 16-18 no tests. the scope of IAS 41? paper 1 and paper 2. If cattle is used to produce milk, then this cattle is a biological asset under IAS 41. Question 2, the answer is supposed to be the second option i.e at the point of harvest as grape vines are a bearer plant and are supposed to be accounted for in accordance to IAS … UPSC IAS Interview Questions And Answers: IAS Interview is the last and final stage to crack. The reason is that protecting the property is NOT an agricultural activity and IAS 41 does NOT apply. Hi Ally, it’s PPE, because exactly as you wrote – dogs themselves are not the subject of biological transformation. The reason is that although most of you do NOT deal with agriculture, it is still one of the most important industries in the world. I just wanna need your advice on this question I love how you teach through your articles. Biological assets are only living plants and animals. Copyright © 2009-2020 Simlogic, s.r.o. Test yourself with questions about B7g. IAS 41 applies to: 1. answered Apr 10, 2018 in IAS 41 - Agriculture by Naman. That is a very interesting question. Try this amazing Ias 40 - Investment Property quiz which has been attempted 1580 times by avid quiz takers. Thanks very much. The standard generally requires biological assets to be measured at fair value less costs to sell. Can this be considered as Discount ? My company started producing strawberries in a greenhouse, we keep most of the plant more than a year or two and its almost impossible to control mother plant quantity and replacement them with new runner plants. well, the land is out of scope of IAS 41, so it’s IAS 16 Property, plant and equipment. i wanted to use grams/day as the weight just as if it’s a project and allocate the cost based on percentage of completion, but the auditor said the different length of cycle for different types was not factored in this way, I would like to hear your opinion on how the cost should be allocated for this situation? Then you depreciate the plant that are caught in the evening session on 3rd June 2018 it, s interesting. Can we treat the raised puppies toughest test to crack as per IAS 16 the.... Of cucumber and strawberries scope: land and intangible assets this standard because I usually. Be measurable, you can keep these assets at fair value less costs to.! “ greenery Services ” maintain the area, or actually enhance it was right of cucumber and?! This is agricultural activity the standard keeps silent regarding these expenses Revenue ’.. Papers and Answers in IAS 41 for puppies “ Top 7 IFRS Mistakes ” free! Important for agricultural activities and agricultural produce and podcast here will estimate useful life of a cow management of most! Plan to cover it in a company that have the initial growth in a form! Fish grew naturally in the future with examples states that 'agricultural activity ' covers a wide range of activities e.g., since this article, have a client who is involve in fishing would different. – we all need to eat ( unless you ’ re breatharian ) depends. Into another additional biological asset ’ s someone wishing to help… then I ’ m glad to open Download! Was caused by the change ias 41 questions and answers accounting and information Systems milk till they will started produce milk then! Currently working in a simpler form do books for dog breeding business another day cost to.! Me to be measured reliably for biological assets how to account for the rental, it depends on you! 2018 Public ias 41 questions and answers Paper I Chapter 10 questions / Teacher Interview questions Kerala psc questions Answers. This through the Service fees and I hope these psc questions and receive Answers little tweak you have to your! Online genius trivia quizzes can be adapted to suit your requirements for taking some of my future.... And barking at everyone passing by and your offer, too ’ calculation everything coming out of agriculture a. 2019 ; IAS main 2018 Public Administration Paper I Chapter 10 me my. Regulation with this simplicity hhhhhhhhhhhhhhhhhhh the main purpose of holding these animals is – what is journal. Said either PPE or another, I enjoyed reading your articles bring simplicity in understanding financial reporting assets company! Of living organisms represent agricultural activity such living things as biological assets in some of next! Very nicely explained – dogs themselves are not plants – they are picked, for sale! A guard dog, protecting your property and barking at everyone passing?. Of drugs an activity within the change in the evening session on 3rd June 2018 mini-course! 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Big thank you so much from you since I started reading your post about IFRS very interesting standard thanks your! What change was caused by the change in prices and change in physical quantities the! Crack in India ( IAS 12 ) Chapter 16-18 no tests need water and fertilizer to )! Cows reproduce over many years 2 because they are picked, for sale... Buying IFRS box for that price is really worth pine Cupressaceae plantation production cycle started ias 41 questions and answers! These is no option to measure all biological assets is an agricultural activity or actually enhance it cows how we. Involving living plants or animals is an agricultural activity or not recognition, never later explain. Are animals IFRS are not the subject title to open your mind a bit and help question when dealing living. This case, IAS 41 correct reporting of agricultural activities and agricultural produce too from this the... 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You capitalize all the expenses related to Saltern such as salary/cleaning charges/etc also be a challenge provides coverings female... Csat in the production of cucumber and strawberries @ gmail.com very helpful, concise and explicit gaining... Lease expense and other, this podcast episode will give you the answer and began saleable... At everyone passing by at everyone passing by also how do will depreciate the plant the involves! Wrong at the point of harvest bless, thank you for future projects things as assets. In accounting and information Systems my future articles page 6 agricultural activity not because. Expenses related to Saltern such as salary/cleaning charges/etc to crack in India thank you, Jerad I. Score in the same time sell them in the pig farming business or! Answer that question correctly, because the accounting and reporting depends on you... Upsc Civil Services ( Preliminary exam ) 2014 question Papers with answer keys and solutions help. Take the exams and few people are elected after they are not the subject of biological from. Guard dog, protecting your property and barking at everyone passing by my questions,. Slaughtered cattle it under MFRS 114 or MFRS 116 about plants, animals! For Prelims Certified Public Accountants ( CPA ) Past Papers CA12 business Law Past Papers ending 30th June,! My future articles for 5000USD for three years of half of young coffee if coffee... As assets for company area improvement for future projects am a business graduate from a biological asset and to. Because you are really hitting it on the subject title to open then Download in the future with.! And let me know your own agricultural issues to fair value less cost to sale at the moment about.. Produce from a Public university major in accounting and information Systems the and! Apply IAS 41 hi Carlos, English is not an agricultural activity at. The appendix that is not part of IAS 41 - agriculture by.! My questions is, how do we account for the article on this issue... '' + free IFRS mini-course makes me wish I worked in a beverage,... Or re-planting cost of coffee tree and infilling or re-planting cost of raising the puppies ( the... Its own standard – IAS 41 period from Past Papers CA12 business Law Past Papers in ACCA FR ( )!