International standards include hardly any industry-specific guidelines, as compared with many individual countries. A major exception concerns agriculture, which is dealt with in IAS 41 Agriculture. This standard was written at the behest of the World Bank, which gave the International Accounting Standards Committee (IASC – the original body that became the IASB in 2001) a significant grant to provide it. Even so the subject kept getting deferred from the agenda and it was to be the very last standard issued by the IASC.

International standards include hardly any industry-specific guidelines

Broadly the standard aims to measure agricultural revenue in the year when the increase in value took place, rather than only on sale of the assets. In that sense it is very similar to IAS 11 Construction Contracts – revenue is measured as earned and not deferred until the completion of the transaction. Unlike IAS 11, the agriculture standard calls on agricultural entities to measure their livestock and other living assets (‘biological assets’) at fair value less costs to sell at each reporting date. IAS 41 is therefore the nearest thing there is in IFRS to a ‘full fair value’ approach to accounting, even though it falls slightly short because it mandates the deduction of selling costs.

However, it also does not necessarily fit fair value as now defined because where there is no active market, value must be estimated as a proportion of the likely sales proceeds when the asset ...

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