IAS 41 Agriculture — ACCA Practice Question 06

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Identify if the plant is a 'bearer plant'. Bearer plants are treated as PPE (IAS 16). The produce growing on bearer plants is a biological asset (IAS 41) until harvest.

Full Answer

B.Grapevines: IAS 16 (Cost or Revaluation); Grapes: IAS 41 (Fair value less costs to sell)✓ Correct

Under the amendments to IAS 16 and IAS 41, 'bearer plants' (like grapevines, rubber trees, and oil palms) are accounted for under IAS 16 Property, Plant and Equipment, using either the cost or revaluation model. However, the agricultural produce growing on the bearer plants (the grapes) remains within the scope of IAS 41 Agriculture and is measured at fair value less costs to sell until the point of harvest.

Common mistakes

Assuming that because the grapevines are living plants, they must be accounted for under IAS 41 at fair value.

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Practice the full ACCA FR — Financial Reporting Practice Exam 5

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