IAS 41 Agriculture
Biological assets are generally measured at fair value less costs to sell, with changes in profit or loss, subject to the standard’s exceptions. Produce at harvest is measured at fair value less costs to sell, becoming cost for later accounting under IAS 2 or another applicable standard. Bearer plants are within IAS 16, while produce growing on them remains within IAS 41. Processing after harvest is outside biological transformation.
Worked example
A farm shears wool from its sheep. At harvest, the wool is measured at fair value less costs to sell, and that amount becomes its starting inventory cost under IAS 2.
Common mistake
Treating qualifying bearer plants as IAS 41 biological assets or applying IAS 41 to processed goods indefinitely after harvest.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |