Search for topics, meetings etc.

  Global (English)

Home News Publications Meetings Standards Projects Jurisdictions Resources

International Accounting Standards International Accounting Standards IAS 41 — Agriculture Quick

Standards

IAS 41 — Agriculture IAS 41 — Ite

agenda

IAS 41 sets out the accounting for agricultural activity – the transforma-
Annual imp
tion of biological assets (living plants and animals) into agricultural pro-
2020 cycle
duce (harvested product of the entity's biological assets). The standard
generally requires biological assets to be measured at fair value less Deloitte e-l
costs to sell. IAS 41 was originally issued in December 2000 and first ap-
plied to annual periods beginning on or after 1 January 2003.

Relate
History of IAS 41
European U
Date Development Comments
May 2020 a

December 1999 Exposure Draft E65 Comment deadline Updated IA

Agriculture 31 January 2000 Analysis (M

IASB conclu
December 2000 IAS 41 Agriculture issued Operative for an- annual imp
nual financial state-
ments covering peri- IASB updat
ods beginning on or of COVID-1
after 1 January 2003
Updated IA
Analysis (Ja
22 May 2008 Amended by Effective for annual
Improvements to IFRSs periods beginning
(discount rates) on or after 1 January
2009 See all

30 June 2014 Amended by Agriculture: Effective for annual

Bearer Plants periods beginning Relate
(Amendments to IAS 16 on or after 1 January
and IAS 41) 2016 public

14 May 2020 Amended by Annual Effective for annual EFRAG end

Improvements to IFRS periods beginning port 2 July 2
Standards 2018–2020 (tax- on or after 1 January
Deloitte e-l
ation in fair value mea- 2022
surements). Click for more EFRAG end
information port 23 Oct

EFRAG end
Related Interpretations port 3 June
 None IFRS in Focu
package of

Amendments under consideration by

the IASB See all
None

Summary of IAS 41 Relate

Objective
Effective da
The objective of IAS 41 is to establish standards of accounting for agricultural
nual impro
activity – the management of the biological transformation of biological as-
sets (living plants and animals) into agricultural produce (harvested product
Comment d
of the entity's biological assets). 2020

Effective da
Scope
IAS 16 and
IAS 41 applies to biological assets with the exception of bearer plants, agri-
cultural produce at the point of harvest, and government grants related to Comment d
these biological assets. It does not apply to land related to agricultural activ- ED/2013/8
ity, intangible assets related to agricultural activity, government grants re-
lated to bearer plants, and bearer plants. However, it does apply to produce
growing on bearer plants. Relate
Note: Bearer plants were excluded from the scope of IAS 41 by Agriculture: Bearer Plants
(Amendments to IAS 16 and IAS 41), which applies to annual periods beginning on or after 1 Annual imp
January 2016. 11

Annual imp
Key definitions 2020 cycle

[IAS 41.5] Annual imp

2017 cycle
Biological A living animal or plant
asset Annual imp
2015 cycle

Bearer plant* A living plant that: IAS 19 — D

1. is used in the production or supply of agricul- curtailmen
tural produce
2. is expected to bear produce for more than
one period, and
3. has a remote likelihood of being sold as agri- Relate
cultural produce, except for incidental scrap
sales. IASB annua
process

Agricultural The harvested product from biological assets

produce

Costs to sell The incremental costs directly attributable to the

disposal of an asset, excluding finance costs and in-
come taxes
* Definition included by Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41), which ap-
plies to annual periods beginning on or after 1 January 2016.

Initial recognition
An entity recognises a biological asset or agriculture produce only when the
entity controls the asset as a result of past events, it is probable that future
economic benefits will flow to the entity, and the fair value or cost of the as-
set can be measured reliably. [IAS 41.10]

Measurement
Biological assets within the scope of IAS 41 are measured on initial recogni-
tion and at subsequent reporting dates at fair value less estimated costs to
sell, unless fair value cannot be reliably measured. [IAS 41.12]

Agricultural produce is measured at fair value less estimated costs to sell at

the point of harvest. [IAS 41.13] Because harvested produce is a marketable
commodity, there is no 'measurement reliability' exception for produce.

The gain on initial recognition of biological assets at fair value less costs to
sell, and changes in fair value less costs to sell of biological assets during a
period, are included in profit or loss. [IAS 41.26]

A gain on initial recognition (e.g. as a result of harvesting) of agricultural pro-

duce at fair value less costs to sell are included in profit or loss for the period
in which it arises. [IAS 41.28]

All costs related to biological assets that are measured at fair value are
recognised as expenses when incurred, other than costs to purchase biologi-
cal assets.

IAS 41 presumes that fair value can be reliably measured for most biological
assets. However, that presumption can be rebutted for a biological asset
that, at the time it is initially recognised, does not have a quoted market
price in an active market and for which alternative fair value measurements
are determined to be clearly unreliable. In such a case, the asset is measured
at cost less accumulated depreciation and impairment losses. But the entity
must still measure all of its other biological assets at fair value less costs to
sell. If circumstances change and fair value becomes reliably measurable, a
switch to fair value less costs to sell is required. [IAS 41.30]

Guidance on the determination of fair value is available in IFRS 13 Fair Value

Measurement. IFRS 13 also requires disclosures about fair value
measurements.

Other issues
The change in fair value of biological assets is part physical change (growth,
etc) and part unit price change. Separate disclosure of the two components
is encouraged, not required. [IAS 41.51]

Agricultural produce is measured at fair value less costs to sell at harvest,

and this measurement is considered the cost of the produce at that time (for
the purposes of IAS 2 Inventories or any other applicable standard). [IAS
41.13]

Agricultural land is accounted for under IAS 16 Property, Plant and

Equipment. However, biological assets (other than bearer plants) that are
physically attached to land are measured as biological assets separate from
the land. In some cases, the determination of the fair value less costs to sell
of the biological asset can be based on the fair value of the combined asset
(land, improvements and biological assets). [IAS 41.25]

Intangible assets relating to agricultural activity (for example, milk quotas)

are accounted for under IAS 38 Intangible Assets.

Government grants
Unconditional government grants received in respect of biological assets
measured at fair value less costs to sell are recognised in profit or loss when
the grant becomes receivable. [IAS 41.34]

If such a grant is conditional (including where the grant requires an entity not
to engage in certain agricultural activity), the entity recognises the grant in
profit or loss only when the conditions have been met. [IAS 41.35]

Disclosure
Disclosure requirements in IAS 41 include:

aggregate gain or loss from the initial recognition of biological assets

and agricultural produce and the change in fair value less costs to sell
during the period* [IAS 41.40]
description of an entity's biological assets, by broad group [IAS 41.41]
description of the nature of an entity's activities with each group of bio-
logical assets and non-financial measures or estimates of physical
quantities of output during the period and assets on hand at the end of
the period [IAS 41.46]
information about biological assets whose title is restricted or that are
pledged as security [IAS 41.49]
commitments for development or acquisition of biological assets [IAS
41.49]
financial risk management strategies [IAS 41.49]
reconciliation of changes in the carrying amount of biological assets,
showing separately changes in value, purchases, sales, harvesting, busi-
ness combinations, and foreign exchange differences* [IAS 41.50]

* Separate and/or additional disclosures are required where biological assets are measured
at cost less accumulated depreciation [IAS 41.55]

Disclosure of a quantified description of each group of biological assets, dis-

tinguishing between consumable and bearer assets or between mature and
immature assets, is encouraged but not required. [IAS 41.43]

If fair value cannot be measured reliably, additional required disclosures in-

clude: [IAS 41.54]

description of the assets

an explanation of why fair value cannot be reliably measured
if possible, a range within which fair value is highly likely to lie
depreciation method
useful lives or depreciation rates
gross carrying amount and the accumulated depreciation, beginning
and ending.

If the fair value of biological assets previously measured at cost subse-

quently becomes available, certain additional disclosures are required. [IAS
41.56]
 Disclosures relating to government grants include the nature and extent of
grants, unfulfilled conditions, and significant decreases expected in the level
of grants. [IAS 41.57]

Related items

Other

 International Accounting Standards

Projects

 IAS 41 — Items not added to the agenda

 Annual improvements — 2006-2008 cycle

 IAS 41 — Fair value measurement issues in agriculture

 IAS 41 — Bearer plants  Annual improvements — 2018-2020 cycle

Standards

 IAS 41 — Agriculture

Contact us About Legal Privacy Cookies FAQs

© 2025. See Legal for more information. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member
firms and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms are legally separate and independent entities.
DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.