Measurement of Agricultural Activities According to the International Financial Reporting Standards.

IAS 41 Agriculture sets out the accounting for agricultural activities and makes differentiation between biological assets (living plants and animals), agricultural produce (harvested product of the company's biological assets) and products that are the outcome of processing that followed harvest. The standard generally requires biological assets to be measured at fair value less estimated costs to sell, but this method can be applied only if the fair value can be estimated reliably. If this requirement does not stand, the asset is measured at cost decreased by the depreciation and the losses of impairment that accumulated. At the point of harvest the value of agricultural produce is its fair value less estimated costs to sell, and at that time this value is considered the cost of the produce(for the purposes of IAS 2 Inventories. [ABSTRACT FROM AUTHOR]