Question 1

SECTION B - CASE 2: BioHarvest Agri

BioHarvest Agri Co operates commercial vineyards. The year-end is 30 September 20X6.
On 15 September 20X6, BioHarvest harvested 100 tonnes of grapes. The fair value of the grapes at the point of harvest was $2,000 per tonne. Estimated costs to sell were $100 per tonne. The actual cost of harvesting was $50 per tonne.

At what value should the harvested grapes be initially recognized on 15 September 20X6?

Accepted Answer

Apply the IAS 41 measurement rule for agricultural produce at the point of harvest: Fair Value less Costs to Sell. Ignore actual incurred costs for this valuation.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Deducting the actual harvesting costs ($50) from the fair value.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 1

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