Wiley 2022 Interpretation and Application of IFRS Standards

31AGRICULTURE

• Introduction
• Scope
• Definitions of Terms
• Identification
• Recognition and Measurement
  • Basic Principles of IAS 41
  • Determining Fair Values
  • Recognition and Measurement
• Presentation and Disclosures
  • Financial Statement Presentation
    • Statement of financial position
    • Statement of profit or loss and other comprehensive income
    • Additional disclosures
• Examples of Financial Statement Disclosures
• Other Issues
  • Agricultural Land
  • Intangible Assets Related to Agriculture
• US GAAP Comparison

INTRODUCTION

Prior to the development of IAS 41, assets related to agricultural activity and changes in those assets were excluded from the scope of International Accounting Standards. For instance, IAS 2, Inventories, excluded “producers” of livestock, agricultural and forest products “… to the extent that they are measured at net realisable value in accordance with well-established practices in certain industries.” Additionally, national standard setters have produced guidelines that are relatively piecemeal and were aimed at resolving a specific issue. Also, the traditional accountancy models are based on an historic cost and realisation basis which conflicts with the rationale of change in altering biological assets. These factors led to a diversity in accounting treatments, which IAS 41 addresses.

The earlier exclusion of agriculture from most established accounting and financial reporting rules can best be understood in the context of certain unique features of the industry. ...