Question

Part 2. Discuss and answer these questions:

 1. Is the natural breeding of animals in zoos and game parks agricultural activity?

 2. Is ocean fishing agricultural activity?

 3. Is palm plantation agricultural activity? Describe the accounting treatment for biological assets and agricultural products in oil palm plantations

Answer 1

As per IND AS 41 "AGRICULTURE" (IAS 41)

1)Natural breeding of animals in zoos and game parks is NOT an agricultural activity.

Reason-Keeping animals in zoo and game parks is simply control of animals and their management for recreational activities unlike management of transformation of biological asset.

2) Ocean fishing is NOT an agricultural activity.

Reason-Harvesting biological asset from unmanaged sources(ocean)is ouside scope of ind as 41

3)Palm plantation is a agricultural activity.

Reason- the biological asset is in control of entity,future economic benefit associated with asset will flow to entiy and its fair value can be estimated reliably.

accounting treatment

the biological asset will be recognised at fair value less cost to sell (initial recognition),and will be subsequently recognised at the end of each reporting period and any gain or loss arising on such subsequent recognition at the end of each reporting period shall be taken to profit and loss account.

agricultural products in palm oil production shall be taken to balance sheet at fair value less cost to sell on intial recognition under Inventory.No subsequent recognition shall take place on reporting date as the inventories are outside scope of ind as 41.