TOA reviewer (UE) biological assets

Review Module Biological Assets P.M.G Clamor August 24, 2011 Biological asset – living plants and living animals Agricultural produce – harvested product of entity’s biological assets Harvest – detachment of produce from biological asset or cessation of biological asset’s life processes PAS 41 (Agriculture): It is applied to agricultural produce at the point of harvest Processing of agricultural process shall be applied by PAS (Inventories) Agricultural activity – management of biological transformation or harvest of biological assets for sale, conversion into agricultural produce or production of additional biological assets Recognition Control to the assets due to past events Probability of inflow of economic benefits associated to asset Reliability of measurement Measurement  Biological asset – at fair value less cost to sell  Agricultural produce – at fair value less cost to sell at the point of harvest Fair value in biological assets Quoted price in active market a Items traded are homogenous b Buyers and sellers are found at any time c Price are available to public Recent market transaction price Market price for similar asset with adjustments Sector benchmark (by quantity pricing) Present value of expected net cash flows Cost to sell – cost directly attributable to disposal of asset Pro-forma Entries Acquisition of biological assets Biological assets xxx Cash/Accounts payable xxx Birth of biological assets & increase in fair value Biological assets xxx Gain from change in FV xxx Decrease in fair value Loss from change in FV Biological assets xxx xxx