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    Chapter 8 Agriculture

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    Joyce Mae D. Flores
    This document discusses accounting for agricultural activities. It defines biological assets as living animals or plants, and agricultural produce as the harvested output of biological assets. Biological assets are initially and subsequently measured at fair value less costs to sell, while agricultural produce is measured at fair value less costs to sell at the point of harvest. The document also distinguishes between consumable biological assets meant for harvesting and bearer biological assets that are self-generating and used for more than one year.

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    Chapter 8 Agriculture

    Uploaded by

    Joyce Mae D. Flores
    1K views3 pages
    This document discusses accounting for agricultural activities. It defines biological assets as living animals or plants, and agricultural produce as the harvested output of biological assets. Biological assets are initially and subsequently measured at fair value less costs to sell, while agricultural produce is measured at fair value less costs to sell at the point of harvest. The document also distinguishes between consumable biological assets meant for harvesting and bearer biological assets that are self-generating and used for more than one year.

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    This document discusses accounting for agricultural activities. It defines biological assets as living animals or plants, and agricultural produce as the harvested output of biological assets. Biological assets are initially and subsequently measured at fair value less costs to sell, while agricultural produce is measured at fair value less costs to sell at the point of harvest. The document also distinguishes between consumable biological assets meant for harvesting and bearer biological assets that are self-generating and used for more than one year.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    1K views3 pages

    Chapter 8 Agriculture

    Uploaded by

    Joyce Mae D. Flores
    This document discusses accounting for agricultural activities. It defines biological assets as living animals or plants, and agricultural produce as the harvested output of biological assets. Biological assets are initially and subsequently measured at fair value less costs to sell, while agricultural produce is measured at fair value less costs to sell at the point of harvest. The document also distinguishes between consumable biological assets meant for harvesting and bearer biological assets that are self-generating and used for more than one year.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

    Chapter 8 Agriculture

    Learning Objectives

    Differentiate between the following: biological


    assets, agricultural produce and inventory.

    State the initial and subsequent measurements


    of biological assets and agricultural produce.

    Agricultural Activity

     Agricultural Activity is the management by an entity of the biological


    transformation and harvest of biological assets for sale, including exchange or
    non-exchange transactions, or for conversion into agricultural produce, or into
    additional biological assets.

    Common Features of agricultural activities

    a. Capability to change

    b. Management of change

    c. Measurement of change
    Page 1
    MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

    Definitions

     Biological Asset – is a living animal or plant

     Agricultural Produce – is the harvested product of the entity’s biological assets.

    Biological assets Agricultural produce Inventory

    Trees in a plantation forest Felled trees Logs, Lumber

    Plants Harvested cane Sugar

    Corn Corn Starch

    Cotton Clothing

    Dairy cattle Milk Cheese

    Sheep Wool Yarn, Carpet

    Pigs Carcass Ham

    Bushes Leaf Tea

    Vines Grapes Wine

    Fruit trees Picked fruit Processed fruit

    Measurement

     Biological assets - initially and subsequently measured at fair value less costs
    to sell. Gain or losses arising from measurement are recognized in surplus or
    deficit.

     Biological assets whose fair value cannot be reliably determined on initial


    recognition are initially measured at cost and subsequently measured at cost less
    accumulated depreciation and accumulated impairment losses.

     Agricultural produce - initially measured at fair value less costs to sell at the
    point of harvest.

    Determination of Fair value

    Quoted price in an active market xx

    Less: Transport costs (xx)

    Page 2
    MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

    Fair value xx

     If there is more than one active market, the entity shall use the price in the
    market expected to be used.

    Determination of Fair value (continuation)

     If there is no active market, the entity shall estimate the market price based on
    one of the following:

     Most recent market transaction price

     Market prices for similar assets with adjustment to reflect differences

     Sector benchmarks

     Present value of expected net cash flows from the asset.

    Disclosures

     Consumable and Bearer biological assets

     Consumable Biological Assets – are those that are to be harvested as


    agricultural produce or to be sold or distributed as biological assets.

     Bearer Biological Assets – are those that are self-generating and are used
    repeatedly for more than one year.

     Mature and immature biological assets

     Mature Biological Assets – are those that have attained harvestable


    specifications or are able to sustain regular harvests.

     The amount of change in fair value less costs to sell due to physical changes and
    due to price changes.

    To know more information about CHAPTER 8- AGRICULTURE- PLEASE CLICK THE


    LINK: https://www.youtube.com/watch?v=pUfJ_Bckeqc

    To know more information about CHAPTER 8- Determination of fair value- PLEASE


    CLICK THE LINK: https://www.youtube.com/watch?v=4US9miIBAwA

    Reference:

    Accounting for Government and Non-profit Organization by Zeus Vernon B.


    Millan
    Page 3

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