PAS 41.

AGRICULTURE pagpiga)
Carcass (karne ng
SCOPE OF PAS 41 ON AGRICULTURE baboy.
Pigs Hinaharvest sa Sausage, ham
PAS 41 shall be applied to account for the following pamamagitan ng
when they relate to agricultural activity: pag katay.)
a. Biological assets Logs, lumber
b. Agricultural produce (pag pinutol
puno, tinanggal
c. Government grant related to biological asset.
na dahon at
Trees in sanga. Maiiwan
Exclusions: plantation Felled trees na lang yung
a. Land related to agricultural activity (PAS 16). forest main body.
(not a living thing. Classified as PPE in PAS 16) That is logs
b. Bearer plants (PAS 16) NOTE: PAS 41 applies and lumber.
on the agricultural produce of bearer plants. Dumaan na sa
(yung mismong bearer plants lang ang di sakop process)
ng pas 41. Yung agri produce at the point of Harvested cane
harvest, sakop pa rin ng pas 41. Yung mismong (hinaharvest sa
Sugarcane
halaman lang hindi) pamamagitan ng Sugar
plant
c. Government grants related to bearer plants pagsunog ng
(PAS 20). sugarcane plant)
d. Intangible assets are related to agricultural Picked leaves
Tobacco (hinaharvest sa
activity (PAS 38) Cured Tobacco
plant pamamagitan ng
pagputol).
BIOLOGICAL ASSET AND AGRICULTURE
CLASSIFICATION OF BIOLOGICAL ASSETS
BIOLOGICAL ASSETS are living animals and living 1. AS TO CONSUMPTION
plants, except bearer plants. (any animal or plant na A. Consumable biological assets- those that are to
may kinalaman sa agriculture is a bilogical asset. be harvested as agricultural produce or sold as
EXCEPT bearer plants). biological assets. (cinoconsume mo yung life ng
bio asset as you harvest agricultural produce or
AGRICULTURAL PRODUCE is the harvested product kapag binebenta mo. Kapag kinatay mo yung
of an entity’s biological asset. baka. Ang tawag dyan ay consumable biological
asset. Nagrresult siya sa pag alis ng biological
HARVEST is the detachment of produce from a asset sa entity.).
biological asset or cessation of a biological asset’s life B. Bearer biological assets- those that are held to
process. bear produce. Only the agricultural produce is
harvested while the biological asset remains.
EXAMPLES OF BIOLOGICAL ASSETS (yung baka, pwedeng gawing karne or pwede
gawing gatas. Kumukuha ng gatas sa baka. Pag
AGRICULTURAL ganon ang purpose mo. Yung baka is
PRODUCE considered as bearer biological asset. Why?
PRODUCT
BIOLOGICAL (nature: mga
AFTER Kasi kapag ikaw naghharvest, yung agricultural
ASSET produce na di pa
HARVEST produce lang ang kinukuha mo which is milk.
dumadaan sa mga
process) Yung biological asset remains. Kaya tinawag na
Yarn, carpet bearer kasi nagbbear siya or nagbibigay siya ng
(yung agricultural produce sa entity without resulting to
pagtanggal ng the parting of biological asset from the entity).
balahibo sa
sheep. Yung Consumable Bearer
Sheep Wool paggupit yun Plant / X
yung pag Animal / /
harvest or
paraan ng 2. AS TO MATURITY
pagharvest A. Mature biological assets- are those that have
natin ng wool.) attained harvestable specifications (for
Dairy cattle Milk (mismong Cheese
consumable biological assets) or are able to
(baka) milk na nanggaling
sustain regular harvests (for bearer biological
sa cattle. Pagpiga
ng lower portion assets). (mature- ready for harvest. Regular na
ng baka. naghharvest dapat. Meaning ilang beses na siya
Hinaharvest sa nagbubunga at regular yon para maging mature
pamamagitan ng yung bearer na biological asset. Dapat ready na
and mature).
 B. Immature biological assets- are those that DO c. Procreation - creation of additional living
NOT attained harvestable specifications (for animal or plant. (nagpaparami. Nagbabago
consumable biological assets) or are able to tayo)
sustain regular harvests (for bearer biological 2. Production of agricultural produce such as
assets). (immature- not yet ready for latex, tea leaf, wool and milk. (kapag
harvestable specifications.) nagproduce. Nanganak ganon)

AGRICULTURAL ACTIVITY OR SIMPLY b. Management of change- the agricultural activity

“AGRICULTURE” must be “managed” to facilitate biological
Agricultural activity is the management by an entity of transformation by enhancing or at least
the biological transformation and harvest of biological stabilizing conditions necessary for the process
assets for sale or for conversion into agricultural produce to take place. (ikaw ang dahilan ng pagbabago.
or into additional biological assets. You are the reason why that animal or plant
change).

EXAMPLES OF AGRICULTURAL ACTIVITY: Such management distinguishes agricultural

1. Raising livestock (kaya dumami yung livestock kasi activity from other activities.
minamanage mo siya. Ito yung reason kung bakit
malalaki, masisigla ang iyong livestock. For example, harvesting from "unmanaged"
Management by an entity). sources, such as ocean fishing and
2. Annual or perennial cropping deforestation, is not agricultural activity
3. Cultivating orchards and plantations
4. Floriculture c. Measurement of change- The change in quality
5. Aquaculture, including fish farming or quantity brought about by biological
transformation or harvest is measured and
NOTE: ocean fishing is an example of agricultural monitored as a routine management function.
activity. Yung ocean fishing because hindi naman (kailangan kasama sa function ng management
minamanage ng mga mangingisda yung mga isda sa yung pag account or pagmmeasure or
ocean. They are just, kumbaga kinukuha lang nila yung pagbabago ng value ng animals or plants).
mga isda don. Pero hindi sila yung reason kung bakit
malalaki or masigla yung mga isda don. Hindi present PAS 16 BEARER PLANTS (hindi pasok sa definition ng
yung management of an entity. Kaya hindi yon pasok sa biological asset. Accounting treatment is PPE.)
agricultural activity.
A bearer plant is a living plant:
Another example is yung pangangaso or hunting. For a. Is used in the production or supply of agricultural
example sa gubat, yung paghhunt ng baboy ramo. Hindi produce.
rin yon pasok sa agricultural activity. Dahil yung mga b. Is expected to bear produce for more than one
baboy ramo sa gubat is hindi mo minamanage. period. (more than one year)
Kumbaga kinukuha mo lang siya sa gubat. c. Has a remote likelihood of being sold as agricultural
produce, except for incidental scrap sales. (remote-
Deforestation is not a part of agricultural activity. Kasi hindi mangyayari. Hindi siya maibebenta as
yung mga puno na pinuputol mo is hindi mo naman agricultural produce. Incident scrap sales- means for
minamanage. Kumbaga lumaki lang siya ng kusa sa ex: yung coconut tree sa oil palm plantation is
gubat. And dumating ka pinutol mo yung mga puno. namatay or nalanta. So hindi na yan magpproduce
Hindi mo minamanage yung mga puno sa gubat. ng buko. So puputulin at ibebenta natin. Syempre sa
accounting, ayaw natin ng mga asset na
COMMON FEATURES OF AGRICULTURAL ACTIVITY nakatengga. The moment na antengga yan.
Kailangan nating ibenta. Pag ibinenta natin yan may
The common features of agricultural activity are as gain on sale tayo).
follows:
a. Capability to change- living animals and plants In other words, a bearer plant is a living plant that is
are capable of biological transformation. used to grow agricultural produce over the productive
life. (bearer means tagadala. Purpose ng bearer plant is
Biological transformation results from the to grow agricultural produce over productive life lang.
following types of outcome: example may business ka. Ang business mo is mango
1. Asset changes through: graham. Ofc need mo ng mangga. And mango is an
a. Growth - an increase in quantity or example of agricultural produce. San galing? Sa mango
improvement in quality of an animal or plant. tree. May mango tree ka na inaalagaan. Ang purpose
(pag lumalaki or dumami. Yung animal or mo is to produce mango. Kumukuha ng mango para sa
animal) iyong mango graham. Mango is not a part of biological
b. Degeneration - a decrease in quantity or asset. Kasi PPE siya.
deterioration in quality of an animal or
plant. (pag tumatanda) Mango tree > mango > mango graham)
  Is used in the production or supply of
NOTE: in order to be considered as bearer plants. Dapat agricultural produce. (YES. Kasi yung kahoy
consider yung a to c ^^^) whole na).
 Is expected to bear produce for more than one
period. (NO. kasi the moment na pinutol mo
EXAMPLES OF BEARER PLANTS: yung puno. Then wala ka ng makukuhang
a. Trees that produce fruits are bearer plants while the agricultural produce don).
fruits growing on the trees are agricultural produce  Has a remote likelihood of being sold as
until harvested. In an oil palm plantation, a coconut agricultural produce, except for incidental scrap
tree is the bearer plant and the fruit is the sales. (NO. kasi virtually certain yung being
agricultural produce. sold as agricultural produce. Kung ang trees is
(tignan natin if nameet ng coconut yung ang purpose is to grow or to harvest as log or
definition ng bearer plants: lumber. Virtually certain na mismong ibebenta
mo siya. Yung puno mismo as agricultural
 Is used in the production or supply of produce).
agricultural produce. (YES. Yung fruit yung
agricultural produce. Yung buko). b. Annual crops which do not bear produce for more
 Is expected to bear produce for more than one than one period and are held solely to be harvested
period. (YES. Kasi pag pinitas mo yung buko as agricultural produce such as corn and rice are not
sa puno ng coconut, tutubo ulit yung bungo bearer plants. (yung mga alay sa bukid is not a
after ilang months or days). bearer plant. Ang treatment don is biological asset.
 Has a remote likelihood of being sold as May kinalaman sa agriculture yung mga palay).
agricultural produce, except for incidental scrap
sales. (YES. Kasi ang purpose ng coconut tree BEARER ANIMALS
is to produce plant and to produce fruit. And
hindi naman natin ibebenta. Kasi yung coconut Bearer animals, like bearer plants, may be held solely
tree is pwede pang magproduce ng another for produce that they bear. However, bearer animals
agricultura produce. Which is yung kanyang have been explicitly excluded from the IASB
body or katawan. Yung kahoy mismo ng ammendment and will continue to be accounted for
coconut tree. Pero remote likelihood. Ibig under IAS 41.
sabihin, malabong mangyari na ibenta natin
yung coconut tree as agricultural produce. Kasi In other words, bearer animals continue to be reported
ang intention lang natin sa kanya is to produce as biological assets.
fruit. Kaya yan bearer plant)
(example: pig. May kinalaman sa agriculture yan. Then
b. In a vineyard, the grape vines are the bearer plants ang purpose mo kaya ka may baboy is binebenta mo
and the grapes are the agricultural produce. (kasi di yung mga biik. Yung mga biik that is the agricultural
naman natin ibebenta yung mismong grape vines as produce of pig. Which is a bearer animal. Ang
agricultural produce. Kasi nga ang purpose natin is accounting treatment here would be PAS 41 (biological
to produce grapes). asset).

Agricultural produce growing on a bearer plant is Living animals, whether consumable or bearer, are
classified as biological asset. It remains within the scope classified as biological assets if they relate to agricultural
of IAS 41. (ang accounting treatment sa mango tree is activity. (for ex: may business ka. Ang business mo is
PPE. Ang mango ang accounting treatment is PAS 41 magbenta ng breed puppies. Hindi yon pasok sa bearer
(BIOLOGICAL ASSET). Ang accounting treatment animals. Hindi biological asset ang treatment sa ganong
naman sa mango graham is PAS 2 (INEVENTORIES) mga dogs. Yung mga pinapalaki para magproduce ng
puppy and then binebenta natin. Hindi yon biological
Mango tree (PPE) > mango (BIOLOGICAL ASSET) > assets kasi hindi yon related sa agricultural activity).
mango graham (INVENTORIES)
MEASUREMENT OF BIOLOGICAL ASSET
Biological asset is initially and subsequently measured
at fair value less cost to sell. (initially, yan yung amount
na magrreflect if you purchase a biological asset. Or
kapag may bagong biological asset na naproduce. But
may mga time na ang fair value less cost to sell for initial
measurement ng biological asset is hindi available. Pag
Not considered bearer plants ganon, ang measurement would be at COST. Basically
a. Trees grown to be harvested and sold as log or pag cost, yan yung magkano mo binayad to acquire
lumber are not bearer plants. (ang purpose natin is biological asset. Kaya minsan ang initial measurement
ibenta natin as log. ng biological asset ay at cost. Kung di available yung
kanyang fair market value or fair value less cost to sell
Kapag subsequent, or yung end of reporting period.
Magkano yung amount of ur biological asset at the end
of reporting period. Kapag subsequent. Yan ay fair value
less cost to sell. Kasi syempre, yung biological asset mo
nung time na siya ay initially recognize. Iba na yan
pagdating ng end of the year. Kumbaga lumaki na yan.
Nagbago na yung itsura. Nagkaroon na ng changes sa
iyong biological asset. Mas determinable na yung
kanyang fair value less cost to se..).

Agricultural produce is initially measured at fair value

lest cost to sell at the point of harvest. (di na applicable
dito yung COST. Kasi agricultural produce,
nanggagaling yan sa biological asset. Hindi naman yan *maize plants- mais yan or corn plant. Pag naghharvest
binibili, pinoproduce yan ng biological asset). ng corn, tinatanggal mismong corn. If that is the case,
maize plants is considered as consumable plants.
RECOGNITION OF BIOLOGICAL ASSET Considered as bio asset.
A. The entity controls the asset as a result of past *dairy cattle- purpose is to produce dairy products. Pag
event. kumuha ka ng gatas sa baka, buhay pa siya.
B. It is probable that future economic benefits Considered as bio asset.
associated with the asset will flow to the entity. *bottled milk- yung gatas na pinoproduce ng baka naka
C. The fair value or cost of the asset can be measured bottled na? no. dumaan yan sa process. Di na agri
reliably. produce yan. Inventories na yan.
*mango tree- generally considered as bearer plants. Pag
GAIN OR LOSS walang additional information. Ang mango tree ay hindi
A gain may arise on initial recognition of a biological bio asset. Pero dito considered siya as bio asset.
asset. For example, when a calf is born. *picked fruit- agricultural produce yan. Raw pa.
*tea bushes- bearer plant. Kapag nagppick ka pa ng
A loss may arise on initial recognition of a biological leaves nyan buhay pa yan.
asset because cost of disposal is deducted in *picked leaves- raw state. agri produce
determining fair value loss cost of disposal of a *rubber tree- bearer plant. Binubutasan naglalabas ng
biological asset. white substance. Yun yung dagta. Apg kinuha mo yung
dagta, buhay pa. bearer plant
A gain or loss may arise on initial recognition of *land use in agriculture- ppe
agricultural produce as a result of harvesting. *rubber shoes- dumaan sa process, inventories na
*lumber trees- consumble plant yan kasi pinutol mo.
A gain or loss arising on initial recognition of a biological *lumber- inventories na classification. Kasi dumaan na
asset at fair value less cost of disposal and any sa process.
subsequent changes in fair value less cost of disposal
shall be included in profit or loss. (iba yung halaga ng
biik. Sa haalga ng adult pig. So may gain ka. And yung
gain na yon is included in profit or loss. or kaya
nanganak yung mga baboy. May gain ka. Initial
measurement is fair value less cost to sell.

Kapag loss naman. Mas malaki yung binayad mo kesa

sa fair value ng biological asset.)

GAIN ENTRY: (nagkagain kasi nagkaron ng agricultural

produce)

Agricultural Produce xxx

Gain xxx

LOSS ENTRY: (nagkaloss kasi nawalan ng baboy)

Loss xxx
Biological Asset xxx
 Biological asset = 1,400 (yan yung amount na
lalabas sa sfp ni hundred beast as nca)(ans in no.2)

Biological asset per book [108+70+(100*10)]= 1178

(fair value less cost to sell ni hundred beast)

Difference: 1400-1178 = 222

*herd- large group of animals

Biological Asset 222
*assume na yung mga animal na inaalagaan ni hundred
Gain on change in fair value 222
beast is pasok sa PAS 41. Actually di kasi alam kung
qualify ba siya sa PAS 41. Kasi di sapat yung info na
binigay.
*Prior to point of harvesT FVLCS ang measurement. After
1) point of harvest, measurement is at cost/LCNRV.
2021
July 1 Biological Asset 108
Cash 108
(108 is actually the cost. There is no need to
recognize a gain or loss in the initial
measurement. Kasi same yung cost which is
108 as stated sa taas and fmv less cost to sell
sa baba na 2.5 year old which is 108)

Biological Asset 70
Gain from change in fair value of
Biological asset 70
New born animal

2) *Pag kusang lumalaki like tuna di kasama sa agricultural

Dec 31 10 3 yr old anila (120 x 10) = 1200 activity.
*pag dual use pasok sa PAS 41: biological assets.
(pagdating ng december 31, yung 2 year old nya na sampu,
naging 3 year old na yan)

3 yr old animal = 120

(yung binili nya nung july 1 na 2.5 years old. Pagdating ng dec,
3 yr old na rin yan)

0.5 yr old animal = 80

(yung new born nung july 1, pagdating ng dec 31, yana y 0.5
or half yr old animal na)