ECONOMICS

Detailed explanation-1: -IAS 41 Agriculture sets out the accounting for agricultural activity – the transformation of biological assets (living plants and animals) into agricultural produce (harvested product of the entity’s biological assets).

Detailed explanation-2: -IAS 41 deals with biological or organic assets’ cultivation at the point of culling and grants given by any authority or government. It provides the initial measurement of the biological assets’ agricultural produce at the point of harvest only. It does not apply to the process after harvesting.

Detailed explanation-3: -PAS 41 does not apply to the following: Land related to agricultural activity (PAS 16 and PAS 40). Bearer plants (PAS 16). However, PAS 41 applies to the produce on those bearer plants.

Detailed explanation-4: -The International Accounting Standard 41 (IAS 41) states that a biological asset is any living plant or animal owned by the business, and they are typically measured at fair value minus selling costs. For example, livestock such as goats, cows, sheep, pigs, and fish are all considered biological assets.