Exam 35: Agriculture

The accounting treatment for land under AASB 116/IAS 16 and AASB 141/IAS 41 differs depending on whether the land is/isn't an investment property. These differences relate to: I. the recording of changes in fair value. II. the initial measurement of the value of the land. III. the subsequent measurement of the value of the land.

The entry required when an animal is born on a pig farm is:

Under AASB 141/IAS 41, which of the following is a biological asset?

Which of the following is a product resulting from agricultural produce?

When determining the fair value of biological assets when there is no market price for that asset in its present condition AASB 141/IAS 41 requires that:

Which of the following statements is incorrect?

At 30 June 2021 the fair value of Green Valley's vineyard is $2.25 million. At 30 June 2022 the following information is available: Fair value of vines prior to harvest at 31 March 2022 $2 400 000 Fair value of grapes harvested at 31 March 2022 $800 000 Estimated costs to sell - grapes $30 000 Estimated costs to sell - vines $40 000 There have been no changes in fair values between 1 April and 30 June 2022. At 30 June 2022, the vines will be recorded in Green Valley's financial statements at an amount of:

Which of the following is not a cost to sell?

With regards to land used for agricultural purposes, increases in fair value over cost is recognised in equity when the land is:

Jersey Co is a company that farms dairy cattle. Jersey Co owns the farmland on which the cattle are located, having purchased it for $3.5 million in 2019. The land is measured at cost under AASB 116/IAS 16. Details of cattle at 30 June 2021 were as follows: Cows Heifers Number 1400 200 Fair value (less estimated costs to sell) per head \ 590 \2 10 During the year ended 30 June 2022 the following occurred: 400 new cows were purchased at $610 each 76 heifers matured into cows 10 heifers died 600 cows were sold for $650 each The price change between a heifer and a cow at the time of maturity during the year was estimated to be $400. The following is relevant at 30 June 2022: The land has been valued at $5 million. Jersey Co has determined that the following are the appropriate values to use for the purposes of transfers and deaths of heifers. Fair value less estimated costs to sell: Cows: $720 / head Heifers: $300 / head The increase in fair value of all livestock attributable to price change is:

The recognition criteria contained within AASB 141/IAS 41 in relation to recognition of a biological asset or agricultural produce as an asset includes all the following except for:

It is common for companies applying AASB 141/IAS 41 to:

Which standard was issued in 2011 that amended AASB 141/IAS 41?

Which of the following meets the definition of agricultural produce?

AASB 141/IAS 41 defines an agricultural activity as the management by an entity of the biological transformation and harvest of biological assets:

Which of the following statements in relation to government grants is correct?

Outback Co received a $360 000 grant from the government on 1 July 2022. One of the conditions attached to the grant was that Outback Co had to continue farming in the same location for the next 3 years; otherwise the grant would have to be returned in full. The entry to record the receipt of the grant on 1 July 2022 is:

Pure Milk owns dairy cattle. The market value of the cattle is calculated by reference to the litres of milk able to be produced and the lactation rate of the cows. The cattle are regularly sold at auction. Costs incurred to transport the cattle to auction are $3000 per truck. Each truck can transport approximately 100 cattle. Number of mature cows held at 30 June 2021 16 000 Average litres of production per cow 10 000 litres Lactation rate 70% Price per litre 30 cents The market value for each cow at 30 June 2021 is:

Each of the following are agricultural activities except for:

Which of the following are required disclosures under AASB 141/IAS 41? I. Fair value changes attributable to price changes. II. Fair value changes attributable to physical changes. III. Aggregate gain or loss on initial recognition of biological assets. IV. Fair value of agricultural produce harvested during the period, at point of harvest.