PAS 41 AGRICULTURE

I. NATURE
Agriculture means farming or the process of producing crops and raising livestock
PAS 41 prescribes the accounting and disclosures for agricultural and related activity.
PAS 41 applies to the ff. when they relate to agricultural activity:
a. Biological assets, except bearer plants;
b. Agricultural produce at the point of harvest; and
c. Unconditional government grants related to a biological asset measured at its fair
value less costs to sell.
PAS 41 does not apply to the ff.:
a. Land related to agricultural activity (PAS 16 and PAS 40).
b. Bearer plants (PAS 16). However, PAS 41 applies to the produce on those
bearer plants (PAS 20).
c. Government grants related to bearer plants (PAS 20).
d. Intangible assets related to agricultural activity (PAS 38).
PAS 41 applies to agricultural produce only at the point of harvest. After harvest, PAS
2 inventories or other applicable standards is applied.

II. RECOGNITION
A biological asset or agricultural produce is recognized when it meets the asset
recognition criteria, including the reliable measurement of its fair value or cost.
Government grants:
Unconditional grant – recognized in profit or loss when it becomes receivable.
Conditional grant – recognized in profit or loss when the attached conditions are met.
Conditional but the terms of the grant allow part of it to be retained according to the time
that has elapsed – portion of the grant is recognized in profit or loss as the time passes.

III. MEASUREMENT
Biological assets are initially and subsequently measured at fair value less costs to
sell. The gain or loss arising from initial measurement and subsequent changes in fair
value less costs to sell are recognized in profit or loss.
Agricultural produce is, in all cases, initially measured at fair value less costs to sell at
the point of harvest. This will be the deemed cost for subsequent accounting using PAS
2 or another applicable standard. The gain or loss arising from the initial measurement
is recognized in profit or loss.
Government grants that are related to biological assets measured at fair value less
costs to sell.
 IV. TRANSACTION
Consumable biological assets:
a. Livestock intended for the production of meat
b. Livestock held for sale
c. Fish in farms
d. Crops such as maize and wheat
e. Produce on bearer plant
f. Trees being grown for lumber

V. DISCLOSURE
General disclosures:
a. The aggregate gain or loss arising on initial recognition of biological assets and
agricultural produce and from the change in fair value less costs to sell of
biological assets.
b. Description of each group of biological assets.
c. Description of the nature of activities involving each group of biological assets
and physical quantities of assets on hand at the end of the period and output of
agricultural produce during the period.
d. Restrictions on the titles to biological assets
e. Commitments for the development or acquisition of biological assets.
f. Financial risk management strategies related to agricultural activity.
g. Reconciliation of changes in the carrying amount of biological assets, showing
separately changes in fair value less costs to sell, purchases, sales, harvesting,
business combinations, and foreign exchange differences.
Encouraged disclosures (but not required):
a. Consumable and bearer biological assets.
b. Mature and immature biological assets.
c. Changes in fair value less costs to sell during the period (1) due to price change
and (2) due to physical change.
Disclosures for biological assets measured at cost:
a. Description of the assets.
b. An explanation of why fair value cannot be reliably measured.
c. If possible, a range within which fair value is highly likely to lie.
d. Depreciation method, useful lives or depreciation rates.
e. Reconciliation of gross carrying amount and accumulated depreciation at the
beginning and end of the reporting period, showing information on depreciation,
impairment loss and reversal of impairment loss.
Disclosures for government grants:
a. Nature and extent of recognized government grants.
b. Unfulfilled conditions
c. Significant decreases expected in the level of government grants.