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E. Biological Assets

Biological assets refer to living animals or plants held by an entity. These assets are initially measured at fair value less costs to sell, and subsequently at the lower of cost and fair value less costs to sell. Any gain or loss arising from changes in fair value less costs to sell is recognized in profit or loss. Biological assets include livestock, agricultural produce such as harvested crops, and government grants for biological assets.

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Derick Ocampo Fulgencio
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217 views1 page

E. Biological Assets

Biological assets refer to living animals or plants held by an entity. These assets are initially measured at fair value less costs to sell, and subsequently at the lower of cost and fair value less costs to sell. Any gain or loss arising from changes in fair value less costs to sell is recognized in profit or loss. Biological assets include livestock, agricultural produce such as harvested crops, and government grants for biological assets.

Uploaded by

Derick Ocampo Fulgencio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BIOLOGICAL ASSETS

DEFINITION a. INITIAL, FV – COST TO SELL


- BIOLOGICAL ASSETS, non-current assets refer b. SUBSEQUENT, LCNRV
to living animals or living plants GAIN OR LOSS
- AGRICULTURAL PRODUCE, harvested product of - Recognized on initial recognition and any
biological assets subsequent changes
- HARVEST, detachment of produce from - Should be included in profit or loss
biological asset/ cessation of biological asset - Disclosure of gain/loss on initial recognition
life’s processes only
- AGRICULTURAL ACTIVITY, management by an
entity of the biological transformation and BIOLOGICAL ASSETS ATTACHED TO LAND
harvest of biological assets for sale/ for - FV of land – FV of Combined Assets = FV of
conversion into agricultural produce/ into Biological Assets
additional biological assets
o Capability to change GOVERNMENT GRANT
o Management of change 1. UNCONDITIONAL
o Measurement of change a. Measured at FV – Cost to Sell
- BIOLOGICAL TRANSFORMATION i. Recognized as income when
o Growth – increase in quantity/ receivable
improvement in quality b. Measured at Cost – A/Dep’n or
o Degeneration – decrease in quantity/ Impairment Loss
deterioration in quality i. PAS 20
o Procreation – additional living thing 2. CONDITIONAL
o Production of agricultural produce a. Measured at FV – Cost to Sell
- FAIR VALUE, price that would be received to sell i. Recognized as income when
an asset/ paid to transfer a liability in an orderly conditions are met
transaction between market participants at the b. Measured at Cost – A/Dep’n or
measurement date Impairment Loss
o LEVEL 1 INPUTS – quoted prices for i. PAS 20
identical assets in an active market
o LEVEL 2 INPUTS – quoted price for DISCLOSURE
similar assets in an active market and - PRICE CHANGE
quoted price for similar/ identical FV at year-end xx
assets in an inactive market Less: Acquisition Cost xx
o LEVEL 3 INPUTS – developed by an Price change xx
entity
- PHYSICAL CHANGE
FV at year-end (present age) xx
RECOGNITION
Less: FV at year-end (Previous age) xx
1. the entity controls the asset as a result of past
Physical change xx
events
2. it is probable that future economic benefits will
- TOTAL CHANGE IN FV
flow
Price change xx
3. the FV or cost of the asset can be measured
Add: Physical change xx
reliably
Total change in FV xx
MEASUREMENT
BIOLOGICAL ASSETN

- Initially, FV = Cost – A/Dep’n or Impairment


Loss
a. INITIAL, FV – COST TO SELL
b. SUBSEQUENT, FV – COST TO SELL
2. AGRICULTURAL PRODUCE

Prepared by: Jeanette Lampitoc

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