Question

armer can elect to deduct the costs of certain purchased animals or plants either for the year they are purchased or for the year they are sold, if the method chosen clearly reflects income. Which of the following purchases is not eligible for the election? A. Baby chicks bought for raising and resale B. Bean seeds bought for cultivation before sale Christmas tree seedlings bought for cultivation before sale D. Hens bought for egg production

Answer 1

According to International Accounting Standard 41 - The option to deduct cost of purchase either for the year they are purchased or for the year they are sold is avaiable in respect of biological assets.

According to IAS 41 Biologic Assets are those assets that are living – for example, trees, animals, or cannabis.

In the given question Assets refer in option A, C and D are example of biological Assets becasue these are living but asset mention in option C Bean Seeds is not fall under the catagory of Biological Asset.

Hence Answer is

Option C - Where option to deduct will not be allowed.