Agriculture (IAS 41)

This chapter examines the Agriculture (IAS 41) standard that prescribes the accounting treatment and disclosures in the financial statements of operations relating to agricultural activity. Agricultural activity is the process of managing the biological transformation and harvesting of biological assets, either for sale or for converting them into agricultural produce or additional biological assets. The items that are harvested become inventory, and the provisions of IAS 2, Inventories, or other related standard, are applicable. Similarly, this Standard does not deal with processing of product after harvesting. Costs to sell are the direct incremental costs, other than finance costs and income tax, to be incurred on the disposal of an asset. Examples of such costs are commission to brokers and dealers and levies by regulatory authorities and commodity exchanges. Active market is a market where the items traded are homogenous, willing buyers and sellers are normally found at any time, and prices are available to the public.