M&N Private Group

Khaled Shokry
ACCA-IFRS Instructor
CH 13- OTHER ASSETS
IAS 41 AGRICULTURE
A- Scope:
- This standard is related to agriculture activity only. Not simply having animals.
- Agriculture land is accounted for under IAS 16 PPE.
- Intangible assets related to agriculture activity accounted for under IAS 38.
B- Definitions:
A biological asset: is a living animal or plant.
Agriculture produce: is the harvested product of an enterprise's biological asset.
Harvest: detachment of produce from a biological asset.
C- Biological asset : split between
1- Bearer biological asset: animals / plants bear produce ( removed from IAS 41 and accounted for
under IAS 16 PPE )
2- Consumable biological asset: assets sold as final products.
D- Consumable Biological asset:
1- Recognition criteria: Control / future economic benefit / reliable measurement for FV or cost.
2- Measurement: Fair Value less estimated POS (point of sale) costs. In initial recognition only If FV
not available then at cost less accumulated depreciation and impairment losses.
3- P/L: changes in FV less POS costs should go to P/L statement. And entities are only encouraged to
differentiate between changes due to Physical change and Price change.
4- SOFP: biological assets shown in SOFP under a separate class of assets and not under current or
non-current assets. And can be sub classified by class of animal or plant.
E- Agriculture produce
1- It is recognized at the point of harvest. Following harvest IAS2 applies.
2- Should be reported at each reporting date at FV less estimated POS costs.
3- Change in carrying value recognized in P/L statement.
4- SOPF: classified as inventory and disclosed in the notes.
F- Agriculture Grant:
Grant income for agricultural activity is credited to profit or loss as soon as they are
unconditionally receivable. It should be measured at FV POS costs.

IFRS 6 Exploration for and Evaluation of Mineral Resources

A- Scope: this applies only to exploration and evaluation expenditures. Also IFRS 6 applies after
the entity has obtained legal right to explore in a specific area.
B- Recognition and Measurement: Initially Expenditures are capitalized "asset" then the entity
can use its accounting policy as long as it will result in information that is relevant and reliable.
Subsequently cost model or revaluation model can be applied.
M&N Private Group
Khaled Shokry
ACCA-IFRS Instructor
C- Impairment: exploration and evaluation assets must be assessed for impairment when facts
and circumstances suggest that the CV of an asset may exceed its recoverable amount.

IAS 2 INVENTORIES

A- Rule: Inventories should be measured at lower of cost and NRV.

B- Cost: includes all costs incurred in bringing the inventories to their present location and
condition. And it includes "Purchase costs" + "Cost of conversion "+"other costs". The cost of
inventory does Not include "selling cost/Marketing costs/storage costs/abnormal waste"
C- Cost formulae: FIFO/ Weighted average / Specific identification
D- NRV: Sales price less costs of completion and costs to sell.
Note: if inventory is held to satisfy a contract then NRV is the sales price of this contact.
E- Writing down Inventory: if NRV is less than cost the inventory should be written down to its
NRV. The write-down should be recorded as an expense in the P/L.
F- Reversal of Write-down: NRV should be reassessed at the end of each period and compared
again with cost. If the NRV has risen then the previous write down must be reversed to the
extent that the inventory is then valued at the lower of cost and the new NRV.