TMI BlogAgricultureX X X X Extracts X X X X X X X X Extracts X X X X ..... ment Grants and Disclosure of Government Assistance). (d) intangible assets related to agricultural activity (See Ind AS 38 Intangible Assets). 1 [ (e) right-of-use assets arising from a lease of land related to agricultural activity (see Ind AS 116, Leases) ] 3 This Standard is applied to agricultural produce, which is the harvested produce of the entity s biological assets, at the point of harvest. Thereafter, Ind AS 2 Inventories or another applicable Standard is applied. Accordingly, this Standard does not deal with the processing of agricultural produce after harvest; for example, the processing of grapes into wine by a vintner who has grown the grapes. While such processing may be a logical and natural extension of agricultural activity, and the events taking place may bear some similarity to biological transformation, such processing is not included within the definition of agricultural activity in this Standard. 4 The table below provides examples of biological assets, agricultural produce, and products that are the result of processing after harvest: Biological assets Agricultural produce Products that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changes in a biological asset. Costs to sell are the incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxes. A group of biological assets is an aggregation of similar living animals or plants. Harvest is the detachment of produce from a biological asset or the cessation of a biological asset s life processes. 5A The following are not bearer plants: (a) plants cultivated to be harvested as agricultural produce (for example, trees grown for use as lumber); (b) plants cultivated to produce agricultural produce when there is more than a remote likelihood that the entity will also harvest and sell the plant as agricultural produce, other than as incidental scrap sales (for example, trees that are cultivated both for their fruit and their lumber); and (c) annual crops (for example, maize and wheat). 5B When bearer plants are no longer used to bear produce they might be cut down and sold as scrap, for example, for use as firewood. Such incidental scrap sales would not prevent the plant from satisfying the definition of a bearer plant. 5C Produce growing on bearer plants is a biological asset. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset will flow to the entity; and (c) the fair value or cost of the asset can be measured reliably. 11 In agricultural activity, control may be evidenced by, for example, legal ownership of cattle and the branding or otherwise marking of the cattle on acquisition, birth, or weaning. The future benefits are normally assessed by measuring the significant physical attributes. 12 A biological asset shall be measured on initial recognition and at the end of each reporting period at its fair value less costs to sell, except for the case described in paragraph 30 where the fair value cannot be measured reliably. 13 Agricultural produce harvested from an entity s biological assets shall be measured at its fair value less costs to sell at the point of harvest. Such measurement is the cost at that date when applying Ind AS 2 Inventories or another applicable Standard. 14 [ Refer Appendix 1] 15 The fair value measurement of a biological asset or agricultural produce may be facilitated by grouping biological assets or agricultural produce according to significant attributes; for example, by age or quality. An entity selects the attributes corresponding to the attribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal asset, because costs to sell are deducted in determining fair value less costs to sell of a biological asset. A gain may arise on initial recognition of a biological asset, such as when a calf is born. 28 A gain or loss arising on initial recognition of agricultural produce at fair value less costs to sell shall be included in profit or loss for the period in which it arises. 29 A gain or loss may arise on initial recognition of agricultural produce as a result of harvesting. Inability to measure fair value reliably 30 There is a presumption that fair value can be measured reliably for a biological asset. However, that presumption can be rebutted only on initial recognition for a biological asset for which quoted market prices are not available and for which alternative fair value measurements are determined to be clearly unreliable. In such a case, that biological asset shall be measured at its cost less any accumulated depreciation and any accumulated impairment losses. Once the fair value of such a biological asset becomes reliably measurable, an entity shall measure it at its fair value less costs to sell. Once a non-current biological asset meets the cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red at its fair value less costs to sell or a government grant requires an entity not to engage in specified agricultural activity. Ind AS 20 is applied only to a government grant related to a biological asset measured at its cost less any accumulated depreciation and any accumulated impairment losses. Disclosure 39 [ Refer Appendix 1] General 40 An entity shall disclose the aggregate gain or loss arising during the current period on initial recognition of biological assets and agricultural produce and from the change in fair value less costs to sell of biological assets. 41 An entity shall provide a description of each group of biological assets. 42 The disclosure required by paragraph 41 may take the form of a narrative or quantified description. 43 An entity is encouraged to provide a quantified description of each group of biological assets, distinguishing between consumable and bearer biological assets or between mature and immature biological assets, as appropriate. For example, an entity may disclose the carrying amounts of consumable biological assets and bearer biological assets by group. An entity may further divide those carrying amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup that is classified as held for sale) in accordance with Ind AS 105; (d) decreases due to harvest; (e) increases resulting from business combinations; (f) net exchange differences arising on the translation of financial statements into a different presentation currency, and on the translation of a foreign operation into the presentation currency of the reporting entity; and (g) other changes. 51 The fair value less costs to sell of a biological asset can change due to both physical changes and price changes in the market. Separate disclosure of physical and price changes is useful in appraising current period performance and future prospects, particularly when there is a production cycle of more than one year. In such cases, an entity is encouraged to disclose, by group or otherwise, the amount of change in fair value less costs to sell included in profit or loss due to physical changes and due to price changes. This information is generally less useful when the production cycle is less than one year (for example, when raising chickens or growing cereal crops). 52 Biological transformation results in a number of types of physical change-growth, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal assets; (b) an explanation of why fair value has become reliably measurable; and (c) the effect of the change. Government grants 57 An entity shall disclose the following related to agricultural activity covered by this Standard: (a) the nature and extent of government grants recognised in the financial statements; (b) unfulfilled conditions and other contingencies attaching to government grants; and (c) significant decreases expected in the level of government grants. 2 [ Effective date and transition_________________________________________________ 58-63 Omitted* (*Refer Appendix 1) 64 Ind AS 116 amended paragraph 2. An entity shall apply that amendment when it applies Ind AS 116. ] 5 [ 65 Annual Improvements to Ind AS (2021) , amended paragraph 22. An entity shall apply that amendment to fair value measurements on or after the beginning of the first annual reporting period beginning on or after 1st April, 2022. ] Appendix 1 Note: This Appendix is not a part of this Indian Accounting Standard. The purpose of this Appendix is only to bring out the differences, if any, between Indian ..... 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