IPSAS Explained: A Summary of International Public Sector Accounting Standards, 2nd Edition

IPSAS 27: Agriculture

Objective

IPSAS 27 prescribes the accounting treatment and disclosures related to agricultural activity. It deals mainly with the accounting treatment for biological assets during the period of growth, degeneration, production, and procreation, and for the initial measurement of agricultural produce at the point of harvest.

The IFRS on which the IPSAS is based

IAS 41, Agriculture

Content

Principal definitions

Agricultural activity is the management by an entity of the biological transformation and harvest of biological assets for sale, distribution at no charge or for a nominal charge or for conversion into agricultural produce, or into additional biological assets for sale or for distribution at no charge or for a nominal charge. Agricultural activity comprises such activities as raising livestock, forestry, annual or perennial cropping, cultivating orchards and plantations, floriculture, and aquaculture (including fish farming). IPSAS 27.10 lists certain common features of agricultural activities.

Agricultural produce is the harvested product of the entity's biological assets, whereas a biological asset is a living animal or plant.

Biological transformation comprises the processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset. Biological transformation has the following types of outcomes:

a) Asset changes through

i) Growth (an increase in quantity or improvement in quality of an ...