Agriculture

SECTION B - CASE 2: BioHarvest Agri BioHarvest Agri Co operates commercial vineyards. The year-end is 30 September 20X6. BioHarvest owns extensive vineyards. The grape vines themselves have an expected productive life of 30 years. Under IFRS, how should the grape vines (the plants themselves, excluding the grapes growing on them) be accounted for?

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?

**Section A** DairyFarm Co owns a herd of 100 cattle. At 1 January 20X5, the herd's fair value was $150,000, with estimated point-of-sale costs of $5,000. During the year, no cattle were bought or sold. At 31 December 20X5, the fair value of the herd increased to $180,000, with estimated point-of-sale costs of $6,000. What amount should be recognized in profit or loss for the year ended 31 December 20X5 regarding the cattle?

**Section A** Highland Dairies owns a herd of cattle. At the year-end, the fair value of the herd at the local market is $150,000. Auctioneer fees would be 5% of the sales price, and it would cost $5,000 to transport the herd to the market. At what amount should the herd be measured in the statement of financial position under IAS 41?

**Section B - Case 3: AgriCorp** *Scenario:* AgriCorp owns vineyards and a grape processing plant. On 1 January 20X4, the carrying amount of the grapevines (bearer plants) was $5,000,000. The fair value of the grapes growing on the vines was $500,000. On 31 December 20X4, AgriCorp harvested the grapes. The fair value less costs to sell of the harvested grapes was $800,000. On 1 January 20X4, AgriCorp received a government grant of $1,000,000 to purchase a specialized eco-friendly tractor costing $4,000,000. The tractor has a useful life of 5 years. AgriCorp accounts for grants by deducting them from the carrying amount of the asset. AgriCorp also holds a portfolio of corporate bonds purchased for $2,000,000 on 1 January 20X4. The business model is to hold the bonds to collect contractual cash flows (principal and interest). At 31 December 20X4, the 12-month expected credit loss (ECL) is $50,000, and the lifetime ECL is $200,000. There has been no significant increase in credit risk since initial recognition. *Question:* How should the grapevines (bearer plants) be accounted for in AgriCorp's financial statements?

**Section B - Case 3: AgriCorp** *Scenario:* AgriCorp owns vineyards and a grape processing plant. On 1 January 20X4, the carrying amount of the grapevines (bearer plants) was $5,000,000. The fair value of the grapes growing on the vines was $500,000. On 31 December 20X4, AgriCorp harvested the grapes. The fair value less costs to sell of the harvested grapes was $800,000. On 1 January 20X4, AgriCorp received a government grant of $1,000,000 to purchase a specialized eco-friendly tractor costing $4,000,000. The tractor has a useful life of 5 years. AgriCorp accounts for grants by deducting them from the carrying amount of the asset. AgriCorp also holds a portfolio of corporate bonds purchased for $2,000,000 on 1 January 20X4. The business model is to hold the bonds to collect contractual cash flows (principal and interest). At 31 December 20X4, the 12-month expected credit loss (ECL) is $50,000, and the lifetime ECL is $200,000. There has been no significant increase in credit risk since initial recognition. *Question:* What is the initial cost of the harvested grapes when transferred to inventory under IAS 2?