Ind AS 41, Agriculture: The goal of Ind AS 41 is to recommend the accounting treatment and disclosures related to agricultural activity.
Ind AS 41
Agricultural activity is the management by an entity of the biological change and harvest of biological assets for sale or for conversion into agricultural fruit and vegetables or into additional biological properties. Biological transformation makes up the processes of development, degeneration, production, and procreation that trigger qualitative or quantitative modifications in a biological asset. A biological property is a living animal or plant. Agricultural produce is the gathered product of the entity’s biological properties. Harvest is the detachment of produce from a biological asset or the cessation of a biological asset’s life cycle.
Fair worth is the cost that would be received to sell an asset or paid to move a liability in an organized transaction in between market participants at the measurement date. (See Ind AS 113, Fair Value Measurement) Expenses to offer are the incremental expenses straight attributable to the disposal of a property, excluding financing expenses and income taxes. Expenses to sell leave out transport and other expenses essential to get the possession to a market.
A biological possession will be measured on initial acknowledgment and at the end of each reporting duration at its fair worth less expenses to sell, except for the case described in paragraph 30 where the fair value can not be measured reliably.
Agricultural produce harvested from an entity’s biological assets shall be determined at its fair value less expenses to cost the point of harvest. Such measurement is the cost at that date when using Ind AS 2 Stocks or another relevant Standard.
A gain or loss emerging on initial recognition of a biological asset at reasonable value less expenses to offer and from a modification in fair value less expenses to offer of a biological asset shall be consisted of in revenue or loss for the duration in which it develops.
A gain or loss occurring on preliminary recognition of farming produce at reasonable value less costs to sell shall be included in revenue or loss for the duration in which it develops.
Ind AS 41 requires that an unconditional government grant associated to a biological possession determined at its fair value less expenses to sell will be acknowledged in profit or loss when, and only when, the government grant becomes receivable.
If a federal government grant associated to a biological possession measured at its fair value less costs to sell is conditional, consisting of when a government grant needs an entity not to take part in defined farming activity, an entity shall identify the federal government grant in revenue or loss when, and only when, the conditions connecting to the government grant are fulfilled.
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