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Ia - Vol1 - Biological Asset

This document discusses accounting for biological assets and agricultural produce under PAS 41. It defines biological assets as living animals or plants used in agricultural activity. Biological assets are classified as consumable if harvested, or bearer if held to bear produce. Measurement involves determining fair value at initial recognition and each financial period end, with gains or losses recognized in profit or loss. Management and measurement of change also requires monitoring physical and price changes in biological assets and agricultural produce.

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BIANCA SOPHIA CABALUNA
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2K views26 pages

Ia - Vol1 - Biological Asset

This document discusses accounting for biological assets and agricultural produce under PAS 41. It defines biological assets as living animals or plants used in agricultural activity. Biological assets are classified as consumable if harvested, or bearer if held to bear produce. Measurement involves determining fair value at initial recognition and each financial period end, with gains or losses recognized in profit or loss. Management and measurement of change also requires monitoring physical and price changes in biological assets and agricultural produce.

Uploaded by

BIANCA SOPHIA CABALUNA
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ANIMALS AND PLANTS

a) capability to change
b) management of change
c) measurement of change

LUMALAKI

TUMATANDA
MANAGEMENT OF CHANGE
- the agricultural activity must be
"managed" to facilitate biological NAGPAPARAMI
transformation by enhancing or
at least stabilizing conditions nece-
sarry for the process to take place.

Agricultural Activity
- raising livestock
-forestry
-annual or perennial cropping
-cultivating orchards and plantation
-aquaculture and floriculture

Not agricultural activity


- Ocean Fishing
-Deforestation ex. ocean fisihing hindi naman ikaw yung nagpalaki sa mga isda
-Hunting in the forest

MEASUREMENT OF CHANGE
- The change in quality or quantity
brought about by biological trans-
formation or harvest is measured
and monitored as a routine.
management function.

Initially FV-Cost of disposal


Subsequently- FV- Cost of disposal

initially and subsequently

PAS 2 (Inventory)
Initally- FV- Cost of disposal
Subsequentrly- LCNRV
Consumable Biological Asset
- those that are to be harvested as
agricultural produce or sold as
biological asset
(kinatay ang baka para mabenta
o ito ay pinapatay na magreresulta
sa pagkawala nang asset)

Bearer biological Asset


- those that are held to bear
produce. Only the agricultural
produce is harvested while the
biological asset remains.
( inaani lang ang mga bunga o pwedeng maibenta)
CONSUMABLE BEARER
PPE
PLANT
ANIMAL
Plants w/ dual purposes = BIOLOGICAL ASSET
consider as PPE
Price Change- ( Price end - Price Beg.) x qty.
the assumption is : SAME AGE (beg. age) ;DIFFERENT AGE

Physical Change- ( Price end, End Age - Price end, Beg Age) x qty
+ fair value less cost of disposal of NEWBORN
the assumption is: DIFFERENT AGE ; same date (year end)
Price Change: Physical Change:
Cows ( 18,000 - 15,000) * 100 = 300,000 Cows (24,000 - 18,000) *100 = 600,000
New born ( 5,000-4,000) *20= 20,000 New born (7,000 - 5,000) * 20 = 40,000
320,000 @ BIRTH ( 20 calves * 4k ) 80,000
720,000

1,040,000
biological
ppe
ppe

ppe
PPE
Biological

biological
agricultural / inventory
biological

Freestanding trees 5,000,000


bearer animanls 2,000,000
agricultural produce
growing on bearer plants 800,000
plants with dual use 1,400,000

total biological assets 9,200,000

land under trees 600,000


roads in forest 300,000
animals related to
recereational actiities 1,000,000
bearer plants 1,500,000

total PPE 3,400,000


\
Bearer plants- 1/1/20 500,000
depreciation for 2019
(500k / 5) (100,000)

C/A of bearer plants 400,000


land 1,000,000
Total PPE 1,400,000

Fair value less cost of disposal- 12/31/2020 50,000

FV less cost of disposal- 12/31/2023 75,000


FV less cos of disposal- 12/31/2022 (50,000)
Gain from change in FV for 2023 25,000
Fair Value of milk produce 600,000
gain from change in FV 50,000
total income 650,000
less: inventories used (140,000/)
staff costs (120,000)
depreciation expense (15,000)
other operating expense (190,000)
Income before income tax 185,000
less: income tax expense (55,000)
Net income 130,000)

Diary livestock - immature 50,000


Dairy livestock- mature 400,000

fair value of biological assets 450,000

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