Christian Mark L.

Codera FAR QUIZZES

BA5MA BSA MODULE 6

1. What are the characteristics of Agriculture Activity?

Agricultural activities are distinguished by the fact that management facilitates and
manages biological transformation and is capable of measuring the change in the quality
and quantity of biological assets. Management of biological transformation normally takes
the form of activity to enhance, or at least stabilize, the conditions necessary for growth,
degeneration, production and procreation, that cause qualitative or quantitative changes
in a biological asset.
Examples of agricultural activity include:

• Raising livestock, fish, or poultry

• Stud farms (for example, breeding horses or cattle)

• Forestry

• Cultivating vineyards, orchards, or plantations

• Floriculture

2. What is IAS 41?

IAS 41 establishes the accounting treatment for biological assets during their growth,
degeneration, production and procreation, and for the initial measurement of agricultural
produce at the point of harvest.

3. What is IAS 16?

The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and
equipment. The principal issues are the recognition of assets, the determination of their
carrying amounts, and the depreciation charges and impairment losses to be recognized
in relation to them.

4. What is the difference of IAS 41 and IAS 16?

Biological assets are measured at fair value to correctly reflect the future economic
benefits that will be received from the biological transformation. Mature bearer plants are,
however, fully grown and biological transformation is no longer significant in generating
future economic benefits.
5. What is IAS 20?
IAS 20 defines a government grant as a transfer of resources in return for past or future
compliance with certain conditions relating to the operating activities of the company.

6. What is IAS 38?

IAS 38 sets out the criteria for recognizing and measuring intangible assets and requires
disclosures about them. An intangible asset is an identifiable non-monetary asset without
physical substance. Such an asset is identifiable when it is separable, or when it arises
from contractual or other legal rights.

7. Where IAS 41 does not apply?

It does not apply to land related to agricultural activity, intangible assets related to
agricultural activity, government grants related to bearer plants, and bearer plants.
However, it does apply to produce growing on bearer plants.

8. What is Biological Asset? and give examples.

The International Accounting Standard 41 (IAS 41) states that a biological asset is any
living plant or animal owned by the business, and they are typically measured at fair value
minus selling costs. For example, livestock such as goats, cows, sheep, pigs, and fish
are all considered biological assets.

9. What is Agricultural produce? and give examples.

agricultural products mean agronomic, horticultural, viticultural, aquacultural, forestry,
dairy, livestock, poultry, bee, and any other farm or ranch products. Examples
include cereals, coffee beans, sugar, palm oil, eggs, milk, fruits, vegetables, beef, cotton,
and rubber.

10. How to measure biological assets?

The International Accounting Standard 41 (IAS 41) states that a biological asset is any
living plant or animal owned by the business, and they are typically measured at fair value
minus selling costs. For example, livestock such as goats, cows, sheep, pigs, and fish
are all considered biological assets.

11. How to measure Agricultural produce?

Agricultural produce is measured, at the point of harvest, at fair value less estimated
costs to sell at the point of harvest. The point of harvest represents the transition
between accounting for agricultural produce assets under IAS 41 and IAS 2
12. What is government grants of IAS20? Provide personal understanding (essay)

The term government refers to the government, government agencies, and similar
bodies at the local, national, and international levels. Government assistance is a
government action designed to provide an economic benefit to a specific entity or group
of entities that meet certain criteria. For the purposes of this Standard, government
assistance does not include benefits obtained only indirectly through actions affecting
general trading conditions, such as the provision of infrastructure in development areas
or the imposition of trading restrictions on competitors. Government grants are transfers
of resources from the government to an entity in exchange for past or future compliance
with certain conditions relating to the entity's operating activities. They exclude
government assistance that cannot be reasonably valued and transactions with
government that cannot be distinguished from the entity's normal trading transactions.
Grants related to assets are government grants whose primary condition is that the entity
receiving them buy, build, or otherwise acquire long-term assets. Subsidiary conditions
may also be attached, limiting the type or location of the assets, as well as the time
periods for which they must be acquired or held. Grants related to income are different
from grants related to assets. Forgivable loans are those for which the lender agrees to
waive repayment under certain conditions.