07-25-2010, 08:22 AM
Dear members,
I have a serious problem with application of IAS 41.
I have my maize farm which is has maize plants which are one month old. It takes about six months to harvest. There is no market for such immature maize plants. According to IAS 41, biological asset need to be valued at fair value less point-of sale costs. If fair value cannot be established, then one can value it at cost less accummulated depreciation and armotization. But there is no way my plant will depreciate, it will only appreciate in value and there is no mention in IAS 41 of treatement of value appreciation! How do I manouver out of this quagmire?
The other issue is IAS 41 Para 35 requires that if the grant is conditional, it shall be recognized as income when, and only when, the attached conditions are met.
When are we going to recognize government grant as income if there is a condition attached to it that an entity not to engage in specified agricultural activity?
I have a serious problem with application of IAS 41.
I have my maize farm which is has maize plants which are one month old. It takes about six months to harvest. There is no market for such immature maize plants. According to IAS 41, biological asset need to be valued at fair value less point-of sale costs. If fair value cannot be established, then one can value it at cost less accummulated depreciation and armotization. But there is no way my plant will depreciate, it will only appreciate in value and there is no mention in IAS 41 of treatement of value appreciation! How do I manouver out of this quagmire?
The other issue is IAS 41 Para 35 requires that if the grant is conditional, it shall be recognized as income when, and only when, the attached conditions are met.
When are we going to recognize government grant as income if there is a condition attached to it that an entity not to engage in specified agricultural activity?
