IAS 41 - Agriculture

Publication date: 02 Oct 2018

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In January 2018, the Board agreed to propose an amendment to paragraph 22 of IAS 41. The amendment will remove the requirement to exclude taxation cash flows when measuring fair value. The timing of an exposure draft depends on the identification of other matters to include in an annual improvements cycle.


Agricultural activity is defined as the management of biological transformation and harvest of biological assets (living animals and plants) for sale or for conversion into agricultural produce (harvested product of biological assets) or into additional biological assets.

Biological assets that meet the definition of ‘bearer plants’ are measured either at cost or revalued amounts, less accumulated depreciation and impairment losses under IAS 16.

All other biological assets, including produce growing on a bearer plant are usually measured at fair value less costs to sell, with the change in the carrying amount reported as part of profit or loss from operating activities. Agricultural produce harvested from an entity’s biological assets is measured at fair value less costs to sell at the point of harvest.

The fair value is measured in terms of IFRS 13.

IFRS 13 looks to the principal market for the asset and not entity-specific measures. The fair value measurement should represent the price in the principal market (whether that price is directly observable or estimated using another valuation technique), even if the price in a different market is potentially more advantageous at the measurement date. [IFRS 13 para 18]. In the absence of a principal market, the entity should use the price in the most advantageous market for the relevant asset.

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