CAF-1 · Chapter 7 · Question 13 of 15
An entity has a biological asset physically attached to land, and there is no separate market for the asset alone, but there is an active market for the combined asset. How can the entity determine the fair value of the biological asset?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) By deducting the fair value of the raw land and land improvements from the fair value of the combined asset.
Explanation
When there is no separate market for biological assets attached to land, an entity can determine their fair value by deducting the fair value of the raw land and improvements from the combined asset's fair value.
More IAS 41 Agriculture MCQs
- Q15When presenting the reconciliation of changes in the carrying amount of biological assets, which of the following separate disclosures is…
- Q1Which of the following items is EXCLUDED from the scope of IAS 41 Agriculture?
- Q2Under IAS 41, how should a biological asset be measured on initial recognition and at the end of each reporting period?
- Q3At the point of harvest, how is agricultural produce measured?
- Q4An entity acquires a herd of cattle. Due to the deduction of estimated costs to sell, the fair value less costs to sell is lower than the…