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6.17 Biological assets—fair value versus historical cost
Publication date: 30 Nov 2020
us IFRS & US GAAP guide
Agricultural activity is the management of the biological transformation of living animals or plants into items for sale, agricultural produce, or additional biological assets. IFRS requires biological assets to be measured at fair value less costs to sell.
US GAAP | IFRS |
Biological assets can be measured at historical cost or fair value less costs to sell, as a policy election. If historical cost is elected, these assets are tested for impairment in the same manner as other long-lived assets. If fair value is elected, all changes in fair value in subsequent periods are recognized in the income statement in the period in which they arise. | Under IAS 41, biological assets are measured at fair value less costs to sell for initial recognition and at each subsequent reporting date, except when the measurement of fair value is unreliable. All changes in fair value are recognized in the income statement in the period in which they arise. |
Bearer plants are accounted for under IAS 16, Property, Plant and Equipment. Whereas, the produce growing on bearer plants is within the scope of IAS 41 and measured at fair value. Once harvested, produce is in the scope of IAS 2, Inventories. |
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