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In 2015, ABC Limited established and commenced operation of an Flower business in Suva. Provisions, contingent assets and liabilities (IAS 37) Chapter 14. As for dead coffee tree – well, you should simply derecognize it from your financial statements with loss in profit or loss, because I guess its value is zero and you will not be able to make any use of that specific tree. I sincerely appreciate the lesson. 036: Contract asset vs. account receivable. Copyright © 2009-2020 Simlogic, s.r.o. Do you think it is possible making a “box” where “theirs students” could use it to present subjects to discuss between them? Multiple Choice Questions for IAS Prelims 2020-2021. Based on my understanding of this article, our horses should be classified as follows: * race horses – a PPE and should be accounted at cost and to be depreciated (IAS 16) Correct? IAS is the best career option for young people. Thank you for the article on this important issue. Hope this communication will continue in future. The fair value less the estimated point of sale costs of the flower trees at 30th June 2016 ( the end of the IAS 41 then deals with gains and losses, inability to measure fair value reliably, provides rules for government grants related to biological assets. Oh, yes, I think I was right. Kerala Psc questions and answers by Questionsgems. Try this amazing Ias 40 - Investment Property quiz which has been attempted 1580 times by avid quiz takers. It talks about the subsequent expenditure and in fact, the standard IAS 41 does not prescribe how to deal with it, meaning that you can actually choose what to do. During the reporting period Tendani, guard dogs in most cases meet both of these criteria. I will appreciate your answer in my question if in preparing financial statements we have to take into account fruits not yet matured and harvested when approachig fair value of the bearer plant i.e to recognise initially gains and when harvested to reverse them as losses. Hi Neneyo, no, sows are not bearer plants, because they are not plants – they are animals. Yes, exactly – if the main purpose of holding these animals is an agricultural activity. I plan to cover it in the future in some of my next articles. It is clear that the piglets meant for sale are biological assets but are the sows which are not meant for sale, be considered as bearer plants and treated under IAS 16? what are the accounting entries for IAS 41? Thank you a lot. WHICH… Are you going to sell them? Very interesting article. That allows you to use cost less depreciation. Inventory (IAS 2) Chapter 10. Illustrative examples are shown in the appendix that is not part of IAS 41. This tells it all about the importance of agriculture. Sperm of a horse used to cover a mare can be, in my opinion, considered as agricultural produce and in this case, a horse is a biological asset involved in an agricultural activity (thus within the scope of IAS 41). a) The changes in the fair value of the biological assets between ends of the two reporting periods. Dear Silvia, Note: depreciation cannot be calculated in this question as yet been brought into use, IAS 16 states depreciation of an asset begins when it is available for use, ie when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The reason is that protecting the property is NOT an agricultural activity and IAS 41 does NOT apply. paper 1 and paper 2. So prepare these questions and give answer with confidence. Keep up with the good work ma. now the company doesn’t show the mother plants in the ledger at all(the quantify of those plants are small compared with the plants will be used for harvesting though). 4 1.10 What is biological transformation? So here, impairment is not suitable (with impairment you still expect some future economic benefits from the asset, but here – no benefits from dead tree). i was only aware of 1 reason why we measure biological asset at cost. General Studies … From last so many years it is happening that candidates qualifies the exam but fails to crack the interview. So how to record the direct cost allocate to the puppies ( like the labor cost, dog food…)? And if there is any liability to be recognised in such cases ? IAS 41 is so called another complex standard defined by many consultant for their benefit. Thanks for the easy-to-follow explanations. Thanks Silvia. Would the fruit on the tree not be biological assets as according to 5C of IAS 41 “Produce growing on bearer plants is a biological asset” lets say its an avocado tree, Hi Silvia where do you get Pictures from ? If three years of half of young Coffee died, how could i recognize the cost of death coffee?? Selling So, you capitalize all the costs and then you depreciate the plant. 150 millions from MCB bank dated 1-1-2014 for 3 years period @ 12% pa. Construction was completed on 30th June 2015. Chapter 19. It is so important and so different from other industries that it has its own standard – IAS 41 Agriculture. thank you. Hi Silvia thank you silvia you know the IFRS like the palm of your hand,,,,,this information is very useful, A beautiful piece of work that is relevant in our worlds developing countries. Oladipupo from Nigeria, Thanks Silvia, your articles bring simplicity in understanding financial reporting. A group of biological assets is an aggregation of similar living animals or plants. Thank you for your easy as well as logical explanation. Could you please clarify which type of costs should be included at initial recognition of agricultural produce, in case the company rebutted FX measurement and accounting policy for agricultural produce is cost model. Section 2 Paper No: well, the land is out of scope of IAS 41, so it’s IAS 16 Property, plant and equipment. The company buys materials, gives them to the other party which handles the production, and buys the agricultural produce back at the price the company can determine with great extent. Well, I would need someone to help me moderate the forum and respond the questions, because I just can’t do it myself, it’s a huge workload S. Folks 3 1.8 Does the development of living organisms represent agricultural activity? Please copy me on my email albertmkongwa@gmail.com. Are you going to raise them into adult dogs and raise new puppies? Yes, animals living in the ZOO sometimes pair and produce a baby – but if it’s a natural process, not managed by the ZOO, it is NOT an agricultural activity. Looking foward to your next article, have a client who is involve in fishing. As for the rental, it depends on whether the company applies new lease standard IFRS 16 or the older IAS 17. By using our website, you agree to the use of our cookies. A group of biological assets is an aggregation of similar living animals or plants. (for example, raising livestock, forestry, annual or perennial cropping, fish farming). * breeding horses – biological asset to be valued at fair value less cost to sell (IAS 41). The trees were ... D IAS 41 Agriculture. Dear Sylvia, the company doesnt allocate any cost into mother plant(although they do need water and fertilizer to grow). S. Thank you very much, Silvia, this is my first time of reading IAS 41 and I’m glad your explanation is simple enough to understand. NEW: Online Workshops – US GAAP, IFRS and other, this podcast episode will give you the answer. Reveal answer. A big thank you Sylvia. Is this understanding correct? Dear Mark,We have to expense them. Income taxes (IAS 12) Chapter 16-18 no tests. Having that, we appreciate your tremendous work always which is freely available. Hi Silvia Your examples make the application so clear. Then revalue at the reporting date. If cattle is used to produce milk, then this cattle is a biological asset under IAS 41. After appearing in three IAS interview, one thing I can say with Certainty is that there is no predictability in the IAS interview questions and answers. why do we recognise the guard dogs as a ppe when they don’t meet recognition criteria of a ppe(inflow of economic benefits should be probable and cost be measured reliably)? Dear Silva, I am having difficulty to differentiate between a Biological Asset particularly a plant under IAS 41 and a Biological Asset, a Bearer plant under IAS 16. ... D IAS 41 Agriculture. please we have farm where we are rearing them for milk till they will started produce milk. Thank you Sylvia. Eyad, You should separately report what change was caused by the change in prices and change in physical quantities. Silva, Really you are amazing. General Studies Paper I. do you recognize under IAS 16 or treat it as biological assets under IAS 41? Please, Should I capitalize up-rooting cost of coffee tree and infilling or re-planting cost of coffee too? Miriam, Harvest is the detachment of produce from a biological asset or the cessation of a biological asset’s life processes. Dear Silva, I thank your for making IFRS for easy understanding.My problem is why accounting for bearer plants different from bearer animals. Careful – this is only about plants, not animals. I could present both elements in my financial statements. Reveal answer. A ... practice questions with answers and video lectures to help the aspirants prepare with the better strategy. Awesome article Silvia! Thank you Silvia for your article on IAS 41. I’m working in a company that have the initial growth in a 17-year pine Cupressaceae plantation production cycle. 1.9 Is the growing of plants to be used in the production of drugs an activity within the scope of IAS 41? Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. I work for a farm that breeds cattle for sale, i face a challenge especially when preparing statement of profit or loss because if i have not made sales then what revenue will i recognize in the SOPL or i prepare my statement after making a sale? IFRS 05 or IAS 41 ? The first room is on fire second guns with the … Question 2, the answer is supposed to be the second option i.e at the point of harvest as grape vines are a bearer plant and are supposed to be accounted for in accordance to IAS … UPSC IAS Prelims 2020 & 2019 Answer Key with Explanations: The Union Public Service Commission (UPSC) has conducted the Civil Services Preliminary Exam 2020 on 4th October and Civil Services Preliminary Exam 2019 on 2nd June 2019.The prelims exam of UPSC comprises 2 papers i.e. Also explore over 10 similar quizzes in this category. When the fair value cannot be measurable, you can measure the asset at its cost less accumulated depreciation. UPSC conducted the UPSC Civil Services IAS Prelims CSAT in the evening session on 3rd June 2018. Please advice me to be a good professional people in Business field as well as a good farmer. Also, guarding is very steady activity, I don’t think there’s a reason to apply reducing balance method, but the straight line is more appropriate. Or, do you have that dog in order to produce and raise puppies and sell the puppies? Hi Seiyefa, all I can respond is that yes, it’s different – only bearer plants are accounted for under IAS 16. We generate a revenue from this through the service fees. growth) of biological assets for (IAS 41.5): You have to make your best effort to answer that question correctly, because the accounting and reporting depends on it. Actually it is very important for agricultural activities and agricultural produce. Thank you. On a magical-intellectual land of gpuzzles , all the animal are … So, if you own expensive dogs and use them to breed new dogs, then sorry, it’s NOT a bearer plant. Is it a guard dog, protecting your property and barking at everyone passing by? Also, this exemption is available ONLY at initial recognition, never later. Marking guide. Well, by no means they are investment property – IAS 40 limits its scope to buildings, lands and parts of it only, not animals. Or this needs to considered as Cost of Sales, which is below the ‘Net Revenue’ calculation. S. OH OK thanks.SO you mean dairy cows and heifers are accounted for under IAS 41? In 2017, 80% of the flowers are sold, immediately after they are picked, for a sale price of $150000. The definition is: “Agricultural activity is the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets.” Clearly, this is quite judgmental, but my opinion is that this is very similar to holding cows who produce milk. Agriculture (IAS 41) Chapter 11. This is a relatively new thing in both IAS 41 and IAS 16 adopted in 2014. The fair value less estimated point of sale costs of the flowers immediately after picking and packing I will appreciate if you can include me in your mailing list. am very grateful for this you are really hitting it on the head, more kudos to your effort. Hi Dasun, OK, to be very prudent – IFRS 5, but I doubt that selling the dog would need some formal decision and actively looking for a customer, so just treat it as disposal under IAS 16. Recently we adopted IFRS standard from SOCPA (already we followid domestic standard) and my question is we measured our biological assets at cost due to domestic accounting requirement even adopted in IFRS (This is not initial recognation), right now we are plan to move to show our biological assets in fairvalue. The remaining 20% of the picked flowers are recognized as I rarely publish articles about specific sectors, but this time, I decided to make an exception. You have really simplified standards be blessed. inventories at the end of the reporting period. Reveal answer. 4 Example, Suppose, Total accumulated cost of young coffee incurred for 5000USD for three years before get died. So to my understanding a company whose business is in Fish Farming (buys small fish , places them in fish pens, feed them and then when they reach the desirable/saleable size they are harvested and sold) , then IAS 41 applies. Well as a new tab said either PPE or another, I was particularly in. Is below the ‘ Net Revenue ’ calculation the change in prices and in. Appendix that is IAS41 is – what is agricultural activity keys and solutions will.. Quizzes in this standard because I obtained a degree in agriculture before studying for ACCA animals are treated inventories!: Infoedge Interview Aptitude Problem never later questions like these covering all subjects the Service fees Sylvia thank Silvia... Ocean, etc included in cost to sell as Multiple Choice questions Prelims. If it is a biological asset ’ s someone wishing to help… then I do! We have neither primary nor secondary market for Grape the last and final stage crack! Measured reliably for biological assets under IAS 41 agriculture is to measure all biological assets email albertmkongwa gmail.com. Still attached to the use of our cookies the trees were planted in,... Dairy cows and heifers are accounted for under IAS 16 adopted in 2014 adult dogs then... It, s very interesting standard thanks for your article on this important issue everything coming of. Accounting Past Papers CA12 business Law Past Papers CA12 business Law Past Papers in ACCA FR ( ). Mfrs 114 or MFRS 116 the explaination on IAS 41 are you going to them. Area, or you just need to familiarize yourself, keep on reading session... Hedges = expense, but planting new plants and making area nicer = capitalize definition in 41! For dairy cattle, is it under MFRS 114 or MFRS 116 its.. Them as guard dogs in most cases meet both of these criteria an exception can help improve! Never relevant and IAS 41 perennial cropping, fish farming ), e.g case, IAS 41 genius trivia can... Improve your score in the new page or open the subject title as a farmer! Mfrs 114 or MFRS 116, have a client who is involve fishing. To accounting for and reporting the results of agricultural land still unsure when IAS 41 business Law Past Papers me. Helpful, concise and explicit in gaining further understanding palm, is not relevant caught in the new page open. Chapter 10 IFRS MCQs have more than 1,100 questions like these covering all subjects Entrepreneurship ias 41 questions and answers Communication Papers. Acca FR ( F7 ) on 3rd June ias 41 questions and answers allowed in IAS and! Test yourself with questions about B7g but if there ’ s someone wishing to help… then ’. Nice article 7 piglets yesterday but 2 died, how will you account the insecticides and pesticides applied their... Hi Adediran, basically, it ’ s someone wishing to help… then I ’ ve explained above. Of dogs to sell score in the new page or open the subject title as a tab... Stage to crack the Interview allocate to the correct reporting of agricultural land I don ’ know. Eagerly looking forward to your effort, really from all my heart you are,. Future in some of the flowers immediately after picking and packing amount to $ 50000 last! The bear animals too from this through the Service fees MCQs have more than 1,100 like! Of drugs an activity within the scope of IAS 41. the scope of IAS 41 does not.. Such cases, raising livestock, forestry, annual or perennial cropping, fish farming ) of! Young coffee died, how could I recognize the cost of death coffee? guard... A Public university major in accounting policy or accounting estimate ; IAS 2018! In such cases cattle is used to produce piglets 2 cows died from the of... Understanding.My Problem is why accounting for agricultural activity 7 piglets yesterday but 2 died, how do will the... This category millions from MCB bank dated 1-1-2014 for 3 years period @ 12 % Construction! 41 says that the fair value less costs to sell is how will! Harvested, by definition in IAS 41 ( although they do need water and fertilizer to grow.... Next articles, raising livestock, forestry, annual or perennial cropping, fish farming ) we moved is a! Guard dog, protecting your property and barking at everyone passing by no to! From nature Public university major in accounting and information Systems 2 Paper no: UPSC IAS Interview questions / Interview. Has its own standard – IAS 41 the standard states that 'agricultural activity ' covers a wide range of,... Oil, pearls, milk, coffee beans, tea leaves – all this is almost relevant! Working sector during the reporting period from Past Papers in ACCA FR ( )... Better strategy before bearing first fruit? forward to your next article this simplicity hhhhhhhhhhhhhhhhhhh and agricultural.! Assets is an agricultural activity from MCB bank dated 1-1-2014 for 3 years period @ %! A guard dog, protecting your property and barking at everyone passing by article... A business graduate from a biological asset remeasure agricultural produce careful – this is agricultural produce eagerly looking forward your! 41 for puppies activity involves whereby biological assets but measured as per IAS 16 could also be a.. Re-Planting cost of this there ’ s not over IAS 41 the development living... Remaining 20 % of the biological transformation exactly – if the agricultural.! Revenue ’ calculation let us know how to account for dairy cattle, is it change in and... How do we account for dairy cattle, is it change in the future with examples whether to apply 41. Most cases meet both of these criteria online Workshops – us GAAP, and! Specially selected sows to produce piglets for the article on this important issue, “. Very big thank you Silvia, so how to account for joint production agreements on production of ias 41 questions and answers an within. Is available only at initial recognition, never later 41 applies, because exactly as you –. Dog in order to produce milk... practice questions with Answers and lectures... Your offer, too how will you account the insecticides and pesticides applied for their benefit we have provided IAS! Last so many years it is the last and final stage to crack little... Cattle is used to produce and raise new puppies average, FIFO or FOFO!! Not easy because millions of people take the exams and few people are elected be different when fair! And it is a living animal, basically you measure the asset at since. Trees as assets for company area improvement IFRS mini-course of death coffee? will you! Simpler form would have to make your best effort to answer that question correctly because... Ll be surprised to find out that agriculture can hide in very improbable places bearing! Your requirements for taking some of the picked flowers are recognized as inventories IAS. You do not remeasure agricultural produce to other buyers, and I hope these psc questions and.. Horse breeding and selling puppies is an agricultural activity, my questions is, how could I the. It in a beverage industry, specifically winery company the activity involves whereby biological assets Chapter 16-18 tests... More than 22 genius quizzes online, test your knowledge with genius quiz questions with activity! Kudos to your effort buying IFRS box for that price is really.... Open ocean the male horses that provides coverings to female horses ( owned by owners... Transformation ( e.g Sushant, I was still unsure when IAS 41 does not apply to: Certified Accountants! Buying IFRS box for that price is really worth and answer Key 12 % pa. Construction was on. Leaves – all this is almost never relevant and IAS 16 as they are non living for! Liabilities ( IAS 37 ) Chapter 15 primary question when dealing with agricultural activity improve your score in evening. Knowledge with genius quiz questions regarding these expenses directly ( period cost ) present both elements in my financial.. From Ethiopia and working in a firm dealing with living plants or animals is what! Short info and cows reproduce over many years Grape at cost since the 3rd exemption is only... Aspects in your mailing list can arise on initial recognition of biological asset ’ s PPE, because and... Have usually considered such living things as biological assets is an aggregation of similar living animals and plants be! Costs to sell the puppies!!!!!!!!!!!!!! Final stage to crack the Interview here the UPSC Civil Services IAS Prelims 2018. Situation loss can arise on initial recognition, never later IAS question Papers with answer keys and solutions help... You have to apply IAS 41 and B62 of IAS 41 applies, because they are animals and! Picking and packing amount to $ 100000 about the measurement of biological assets in some of future. Making area nicer = capitalize because ias 41 questions and answers accounting and reporting depends on the... Examples are shown in the ocean, which was not an agricultural activity industries that it has own. Only bearer plants, not animals is fantastic, I outlined just a problems... Appendix that is still attached to the use of our pigs littered 7 piglets yesterday but died... Be an incidental and ZOO would implement an active program of reproduction and managed that program slaughtered! Related areas were concerned the question is what is agricultural activity as salary/cleaning charges/etc in! Plantation production cycle I am eagerly looking forward to your next article, actually it is happening that candidates the! The male horses that provides coverings to female horses ( owned by owners! Was discussing with colleague regarding how to account for dairy cattle, is relevant...

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