CAF-1 · Chapter 7 · Question 5 of 15
Zenith Farms receives an unconditional government grant related to a biological asset measured at fair value less costs to sell. When should this grant be recognized as income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) When, and only when, the government grant becomes receivable.
Explanation
IAS 41 dictates that an unconditional government grant related to a biological asset measured at fair value less costs to sell shall be recognized in profit or loss when, and only when, it becomes receivable.
More IAS 41 Agriculture MCQs
- 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?
- Q9Which of the following distinguishes agricultural activity from other activities like ocean fishing or deforestation?
- Q10An entity owns a timber plantation. To estimate the fair value of the trees, it has entered into a forward contract to sell the timber in…
- Q11Which of the following is considered a 'consumable' biological asset rather than a 'bearer' biological asset?