(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Section 34Specialised ActivitiesScope of this section34.1 This section provides guidance on financial reporting by SMEs involved in threetypes of specialised activities—agriculture, extractive activities, and serviceconcessions.Agriculture34.2 An entity using this IFRS that is engaged in agricultural activity shall determineits accounting policy for each class of its biological assets as follows:(a)(b)The entity shall use the fair value model in paragraphs 34.4–34.7 for thosebiological assets for which fair value is readily determinable without unduecost or effort.The entity shall use the cost model in paragraphs 34.8–34.10 for all otherbiological assets.Recognition34.3 An entity shall recognise a biological asset or agricultural produce when, and onlywhen:(a)(b)(c)the entity controls the asset as a result of past events;it is probable that future economic benefits associated with the asset willflow to the entity; andthe fair value or cost of the asset can be measured reliably without unduecost or effort.Measurement – fair value model34.4 An entity shall measure a biological asset on initial recognition and at eachreporting date at its fair value less costs to sell. Changes in fair value less costs tosell shall be recognised in profit or loss.34.5 Agricultural produce harvested from an entity’s biological assets shall bemeasured at its fair value less costs to sell at the point of harvest. Suchmeasurement is the cost at that date when applying Section 13 Inventories oranother applicable section of this IFRS.34.6 In determining fair value, an entity shall consider the following:(a)If an active market exists for a biological asset or agricultural produce in itspresent location and condition, the quoted price in that market is theappropriate basis for determining the fair value of that asset. If an entityhas access to different active markets, the entity shall use the price existingin the market that it expects to use.200 © IASCF