Agriculture (Section 34 / IAS 41)

Overview

A biological asset (a living animal or plant) is measured at fair value less costs to sell at each reporting date, with changes in P&L, provided fair value can be measured reliably without undue cost or effort. Where fair value cannot be reliably measured, the cost model applies. Agricultural produce harvested from biological assets is measured at fair value less costs to sell at the point of harvest; thereafter it is treated as inventory under Section 13 / IAS 2.

Required first reads

• doctrine/accounting-finance-doctrine.md
• doctrine/references/ifrs-for-smes-default.md (Section 34)
• doctrine/references/full-ifrs-overlay.md (IAS 41)
• doctrine/references/chart-of-accounts.md

Scope clarifications

• Biological asset: living plant or animal (e.g. poultry, dairy cattle, fish, fruit trees in bearer mode).
• Agricultural produce: the harvested product of biological assets (e.g. eggs, milk, fish at landing, fruit at picking).
• Bearer biological asset (full IFRS): a plant grown for the production of agricultural produce over more than one period and where the likelihood of being sold as produce is remote (e.g. mature fruit trees). Under IAS 41 amended, bearer plants are accounted for under IAS 16 (PPE), not IAS 41. Section 34 retains the older treatment under fair-value-where-measurable.
• Government grants to agriculture: Section 34 (IFRS for SMEs) and IAS 20 / IAS 41 (full IFRS) — recognised as income when conditions met.