IAS 41 Objective Scope

Last Updated on 12/02/2020 by 75385885

IAS 41 AgricultureIAS 41 Objective Scope

IAS 41 Objective Scope

Objective

The objective of this Standard is to prescribe the accounting treatment and disclosures related to agricultural activity.

Scope

1 This Standard shall be applied to account for the following when they relate to agricultural activity:

  1. biological assets, except for bearer plants;
  2. agricultural produce at the point of harvest; and
  3. government grants covered by paragraphs 34 and 35.

2 This Standard does not apply to:

  1. land related to agricultural activity (see IAS 16 Property, Plant and Equipment and IAS 40 Investment Property).
  2. bearer plants related to agricultural activity (see IAS 16). However, this Standard applies to the produce on those bearer plants.
  3. government grants related to bearer plants (see IAS 20 Accounting for Government Grants and Disclosure of Government Assistance).
  4. intangible assets related to agricultural activity (see IAS 38 Intangible Assets).
  5. right-of-use assets arising from a lease of land related to agricultural activity (see IFRS 16 Leases).

3 This Standard is applied to agricultural produce, which is the harvested produce of the entity’s biological assets, at the point of harvest. Thereafter, IAS 2 Inventories or another applicable Standard is applied. Accordingly, this Standard does not deal with the processing of agricultural produce after harvest; for example, the processing of grapes into wine by a vintner who has grown the grapes. While such processing may be a logical and natural extension of agricultural activity, and the events taking place may bear some similarity to biological transformation, such processing is not included within the definition of agricultural activity in this Standard.

4 The table below provides examples of biological assets, agricultural produce, and products that are the result of processing after harvest:

Biological assets

Agricultural produce

Products that are the result of processing after harvest

Sheep

Wool

Yarn, carpet

Trees in a timber plantation

Felled trees

Logs, lumber

Dairy cattle

Milk

Cheese

Pigs

Carcass

Sausages, cured hams

Cotton plants

Harvested cotton

Thread, clothing

Sugarcane

Harvested cane

Sugar

Tobacco plants

Picked leaves

Cured tobacco

Tea bushes

Picked leaves

Tea

Grape vines

Picked grapes

Wine

Fruit trees

Picked fruit

Processed fruit

Oil palms

Picked fruit

Palm oil

Rubber trees

Harvested latex

Rubber products

Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of IAS 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex, is within the scope of IAS 41.

Next: IAS 41 Definitions

 

Source EU rules on financial information disclosed by companies

 

Last Updated on 12/02/2020 by 75385885

Excerpts from IFRS Standards come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). Individual jurisdictions around the world may require or permit the use of (locally authorised and/or amended) IFRS Standards for all or some publicly listed companies.  The information provided on this website is for general information and educational purposes only and should not be used as a substitute for professional advice. The specific status of IFRS Standards should be checked in each individual jurisdiction. Use at your own risk. Annualreporting is an independent website and it is not affiliated with, endorsed by, or in any other way associated with the IFRS Foundation. For official information concerning IFRS Standards, visit IFRS.org or the local representative in your jurisdiction.

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Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of IAS 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex, is within the scope of IAS 41. Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of IAS 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex, is within the scope of IAS 41.

Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of IAS 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex, is within the scope of IAS 41. Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of IAS 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex, is within the scope of IAS 41.