Question

In accordance with IAS 41 Agriculture, which of the following statements is correct?

A fruit tree is initially measured at cost

Dairy cattle are initially measured at fair value

Stores of harvested tea are within the scope of IAS 41

A gain on remeasurement of sheep to fair value is reported in other comprehensive income

Answer 1

i hope you will rate my ans positively.

correct ans is (b) Dairy cattle are initially measured at fair value

IAS 41 impacts those agricultural activities where the income-producing biological assets are living animals or plants and will include the harvested produce of these assets eg if the biological asset is dairy cattle, the agricultural produce is milk or the same distinction could be made with trees in a plantation/felled trees or sugarcane/harvested cane Biological assets do not include bearer plants.

This Standard is applied to agricultural produce, which is the harvested product of the entity’s biological assets, only at the point of harvest. Thereafter, IAS 2 Inventories or another applicable Standard is applied. Accordingly, this Standard does not deal with the processing of agricultural produce after harvest. for eg tea is harvested from leaf and bushes.