CAF-1 · Chapter 7 · Question 2 of 15
Under IAS 41, how should a biological asset be measured on initial recognition and at the end of each reporting period?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) At fair value less costs to sell.
Explanation
IAS 41 requires that biological assets be measured at fair value less costs to sell, from initial recognition up to the point of harvest, unless fair value cannot be measured reliably.
More IAS 41 Agriculture MCQs
- 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…
- Q5Zenith Farms receives an unconditional government grant related to a biological asset measured at fair value less costs to sell. When…
- Q6Omega Dairies receives a government grant on the condition that it farms using organic methods for five years. If it stops, the full grant…
- Q7What is the accounting treatment for a biological asset if its fair value cannot be measured reliably on initial recognition?
- Q8Which of the following processes is NOT a component of 'biological transformation' as defined by IAS 41?