Agriculture Accounting (IAS 41): Biological Assets, Fair Value Less Costs to Sell & Produce

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Classify twelve items of Kerrow Vale Farm as biological asset, bearer plant, produce, processed product or land, and look up the standard that applies to each.
• Value Kerrow Vale's cattle at 31 Dec: market price minus transport gives fair value, minus commission and levy gives fair value less costs to sell (FVLCTS).
• Split the year's fair value gain of Kerrow Vale's cattle into the part caused by market prices and the part caused by growth and ageing.
• There is no market for 24-year-old pine standing in compartment P7, so you estimate its fair value as the present value of the expected net cash flows, leaving out the replanting.
• Measure Kerrow Vale's grape harvest at FVLCTS at the point of harvest, carry it into inventory as deemed cost, and book the harvest and a sale.
• Capitalise the cost of Kerrow Vale's new apple orchard until it is mature, depreciate it over its useful life, and roll the carrying amount forward five years.
• Decide how much of five grants Kerrow Vale may recognise as income at 31 Dec, depending on whether they are unconditional, all-or-nothing or retained pro rata.
• Build Kerrow Vale's IAS 41 reconciliation from opening to closing carrying amount, find the fair value gain as the balancing figure, and show the movement in a waterfall chart.