31. The presumption in paragraph 30 can be rebutted only on initial recognition. An enterprise that has
previously measured a biological asset at its fair value less estimated point-of-sale costs continues to measure
the biological asset at its fair value less estimated point-of-sale costs until disposal.
32. In all cases, an enterprise measures agricultural produce at the point of harvest at its fair value less estimated
point-of-sale costs. This Standard reflects the view that the fair value of agricultural produce at the point of
harvest can always be measured reliably.
33. In determining cost, accumulated depreciation and accumulated impairment losses, an enterprise considers
IAS 2, inventories, IAS 16, property, plant and equipment, and IAS 36, impairment of assets.
GOVERNMENT GRANTS
34. An unconditional government grant related to a biological asset measured at its fair value less estimated
point-of-sale costs should be recognised as income when, and only when, the government grant becomes
receivable.
35. If a government grant related to a biological asset measured at its fair value less estimated point-of-sale
costs is conditional, including where a government grant requires an enterprise not to engage in specified
agricultural activity, an enterprise should recognise the government grant as income when, and only when,
the conditions attaching to the government grant are met.
36. Terms and conditions of government grants vary. For example, a government grant may require an enterprise
to farm in a particular location for five years and require the enterprise to return all of the government grant
if it farms for less than five years. In this case, the government grant is not recognised as income until the five
years have passed. However, if the government grant allows part of the government grant to be retained
based on the passage of time, the enterprise recognises the government grant as income on a time proportion
basis.
37. If a government grant relates to a biological asset measured at its cost less any accumulated depreciation and
any accumulated impairment losses (see paragraph 30), IAS 20, accounting for government grants and
disclosure of government assistance, is applied.
38. This Standard requires a different treatment from IAS 20, if a government grant relates to a biological asset
measured at its fair value less estimated point-of-sale costs or a government grant requires an enterprise not
to engage in specified agricultural activity. IAS 20 is applied only to a government grant related to a biological
asset measured at its cost less any accumulated depreciation and any accumulated impairment losses.
PRESENTATION AND DISCLOSURE
Presentation
39. An enterprise should present the carrying amount of its biological assets separately on the face of its
balance sheet.
Disclosure
General
40. An enterprise should disclose the aggregate gain or loss arising during the current period on initial
recognition of biological assets and agricultural produce and from the change in fair value less estimated
point-of-sale costs of biological assets.
41. An enterprise should provide a description of each group of biological assets.
42. The disclosure required by paragraph 41 may take the form of a narrative or quantified description.
43. An enterprise is encouraged to provide a quantified description of each group of biological assets,
distinguishing between consumable and bearer biological assets or between mature and immature biological
assets, as appropriate. For example, an enterprise may disclose the carrying amounts of consumable biological
assets and bearer biological assets by group. An enterprise may further divide those carrying amounts between
mature and immature assets. These distinctions provide information that may be helpful in assessing the
timing of future cash flows. An enterprise discloses the basis for making any such distinctions.
44. Consumable biological assets are those that are to be harvested as agricultural produce or sold as biological
assets. Examples of consumable biological assets are livestock intended for the production of meat, livestock
held for sale, fish in farms, crops such as maize and wheat, and trees being grown for lumber. Bearer biological
assets are those other than consumable biological assets; for example, livestock from which milk is produced,
grape vines, fruit trees, and trees from which firewood is harvested while the tree remains. Bearer biological
assets are not agricultural produce but, rather, are self-regenerating.
45. Biological assets may be classified either as mature biological assets or immature biological assets. Mature
biological assets are those that have attained harvestable specifications (for consumable biological assets) or
are able to sustain regular harvests (for bearer biological assets).
46. If not disclosed elsewhere in information published with the financial statements, an enterprise should
describe:
(a) the nature of its activities involving each group of biological assets; and
(b) non-financial measures or estimates of the physical quantities of:
(i) each group of the enterprise's biological assets at the end of the period; and
(ii) output of agricultural produce during the period.
47. An enterprise should disclose the methods and significant assumptions applied in determining the fan-
value of each group of agricultural produce at the point of harvest and each group of biological assets.
48. An enterprise should disclose the fair value less estimated point-of-sale costs of agricultural produce
harvested during the period, determined at the point of harvest.
49. An enterprise should disclose:
(a) the existence and carrying amounts of biological assets whose title is restricted, and the carrying
amounts of biological assets pledged as security for liabilities;
(b) the amount of commitments for the development or acquisition of biological assets; and
(c) financial risk management strategies related to agricultural activity.
50. An enterprise should present a reconciliation of changes in the carrying amount of biological assets
between the beginning and the end of the current period. Comparative information is not required. The
reconciliation should include:
(a) the gain or loss arising from changes in fair value less estimated point-of-sale costs;
(b) increases due to purchases;
(c) decreases due to sales;
(d) decreases due to harvest;
(e) increases resulting from business combinations;
(f) net exchange differences arising on the translation of financial statements of a foreign entity; and
(g) other changes.
51. The fair value less estimated point-of-sale costs of a biological asset can change due to both physical changes
and price changes in the market. Separate disclosure of physical and price changes is useful in appraising
current period performance and future prospects, particularly when there is a production cycle of more than
one year. In such cases, an enterprise is encouraged to disclose, by group or otherwise, the amount of change
in fair value less estimated point-of-sale costs included in net profit or loss due to physical changes and due
to price changes. This information is generally less useful when the production cycle is less than one year (for
example, when raising chickens or growing cereal crops).
52. Biological transformation results in a number of types of physical change — growth, degeneration,
production, and procreation, each of which is observable and measurable. Each of those physical changes has
a direct relationship to future economic benefits. A change in fair value of a biological asset due to harvesting
is also a physical change.
53. Agricultural activity is often exposed to climatic, disease, and other natural risks. If an event occurs that
because of its size, nature, or incidence is relevant to understanding the enterprise's performance for the
period, the nature and amount of related items of income and expense are disclosed under IAS 8, net profit
or loss for the period, fundamental errors and changes in accounting policies. Examples include an outbreak
of a virulent disease, a flood, severe droughts or frosts, and a plague of insects.
Additional disclosures for biological assets where fair value cannot be measured reliably
54. If an enterprise measures biological assets at their cost less any accumulated depreciation and any
accumulated impairment losses (see paragraph 30) at the end of the period, the enterprise should disclose
for such biological assets:
(a) a description of the biological assets;
(b) an explanation of why fair value cannot be measured reliably;
(c) if possible, the range of estimates within which fair value is highly likely to lie;
(d) the depreciation method used;
(e) the useful lives or the depreciation rates used; and
(f) the gross carrying amount and the accumulated depreciation (aggregated with accumulated
impairment losses) at the beginning and end of the period.
55. If, during the current period, an enterprise measures biological assets at their cost less any accumulated
depreciation and any accumulated impairment losses (see paragraph 30), an enterprise should disclose any
gain or loss recognised on disposal of such biological assets and the reconciliation required by paragraph 50
should disclose amounts related to such biological assets separately. In addition, the reconciliation should
include the following amounts included in net profit or loss related to those biological assets:
(a) impairment losses;
(b) reversals of impairment losses; and
(c) depreciation.
56. If the fair value of biological assets previously measured at their cost less any accumulated depreciation
and any accumulated impairment losses becomes reliably measurable during the current period, an
enterprise should disclose for those biological assets:
(a) a description of the biological assets;
(b) an explanation of why fair value has become reliably measurable; and
(c) the effect of the change.
Government grants
57. An enterprise should disclose the following related to agricultural activity covered by this Standard:
(a) the nature and extent of government grants recognised in the financial statements;
(b) unfulfilled conditions and other contingencies attaching to government grants; and
(c) significant decreases expected in the level of government grants.
EFFECTIVE DATE AND TRANSITION
58. This International Accounting Standard becomes operative for annual financial statements covering
periods beginning on or after 1 January 2003. Earlier application is encouraged. If an enterprise applies
this Standard for periods beginning before 1 January 2003, it should disclose that fact.
59. This Standard does not establish any specific transitional provisions. The adoption of this Standard is
accounted for in accordance with IAS 8, net profit or loss for the period, fundamental errors and changes in
accounting policies.