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Biological Assets
Biological Assets
ASSETS
IAS 41
S H A L L B E A P P L I E D TO AC C O U N T W H E N
T H E Y R E L AT E T O A G R I C U LT U R A L A C T I V I T Y
SUCH AS BIOLOGICAL ASSET EXCEPT
B E A R E R P L A N T S , A G R I C U LT U R A L P R O D U C E
A N D G O V E R N M E N T G R A N T R E L AT E D T O A
BIOLOGICAL ASSET
PAS 2
R E F E R TO A S I N V E N TO R I E S – I T S H A L L B E
A P P L I E D T H E R E A F T E R AT T H E P O I N T O F
H A R V E S T A N D B E R E A DY F O R S A L E
I. DEFINITIONS
Biological Assets
Living Animals and Living Plants owned by the entity for
agricultural activity
Agricultural Produce
Are the harvested product of an entity’s biological
assets
Inventories
Products after harvest is covered by inventories
II. EXAMPLE
Biological Asset Agricultural Produce Inventories
1.Capability to Change
2.Management of Change
3.Measurement of Change
TRIVIA
Comprise of growth,
degeneration,
Biological production and
procreation that cause
Transformation qualitative or
quantitative changes in
biological asset.
IV. TYPE OF OUTCOME RESULT FROM
BIOLOGICAL TRANSFORMATION
1. Asset Changes through
1. Growth – increase in quantity or improvement of quality
of an animal or plant
2. Degeneration – decrease in quantity or deterioration in
quality of an animal or plant
3. Procreation – creation of additional living animal or plant
2. Production of agricultural produce (i.e. wool, milk,
tobacco)
V. RECOGNITION
Entity shall recognize biological asset and agricultural produce when:
Biological Asset
Biological Asset Agriculture Produce attached to
Agricultural Land
@FV less cost of Disposal @FV less cost of disposal FV of Land less FV of
(commission to brokers, at the point of harvest Combined Asset
admission fee, any
incidental)
Cost
Less: Accumulated Depreciation
Accumulated Impairment Losses
FAIR VALUE for Biological Asset
General Rule : change in biological asset, record as gain/loss
*can be change in physical or value
VIII. PRESENTATION
20 x P12,000 20 x P13,000
=P240,000 =P260,000
5 Newborn (Jan 2)
5 x P4,000 5 x P5,000
=P20,000 =P25,000
5 x P12,000 5 x P13,000
=P60,000 =P65,000
PHYSICAL CHANGE
December 31
20 Cattle @ 2y/o
20 x P13,000 = P260,000
20 Cattle @ 3y/o
20 x P15,000 = P300,000
5 Newborn
5 x P4,000 = P25,000
5 Calves @ 1y/o
5 x P7,000 = P35,000
Purchased 5 Cattle @ 2y/o (P12,000)
5 x P13,000 = P65,000
Purchased 5 Cattle @ 3y/o (P12,000)
5 x P15,000 = P75,000