HKAS41 / IAS 41 Agriculture sets out the accounting for agricultural activity – the transformation of biological assets (living plants and animals) into agricultural produce (harvested product of the entity’s biological assets). The standard generally requires biological assets to be measured at fair value less costs to sell.

Plants that bear produce (such as grape vines, fruit trees, rubber tree plantations and oil palms) so that produce-bearing plants are valued at cost less accumulated depreciation and impairment (as is the case for property, plant and equipment) with the output from these assets to be classified as inventory (and the accounting treatment being the lower of cost or net realisable value).

Our agriculture specialists have deep roots in the industry. In each full scope valuation, they access living conditions carefully and perform necessary due diligence in providing opinions that support valuation.

Livestock Operations

Whether you’re in the business of beef, dairy, hogs or poultry, our agriculture specialists
are here to model the business underlying the overall operation.

Type Key Concepts Handling
Bearer plant  A living plant that:

  • is used in the production or supply of agricultural produce
  • is expected to bear produce for more than one period,
  • and has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.
Agricultural produce  The harvested product from biological assets

Agricultural produce is measured at fair value less estimated costs to sell at the point of harvest. [IAS 41.13] Because harvested produce is a marketable commodity, there is no ‘measurement reliability’ exception for produce.

Hands-on Experience
  • A great variety of tea plants
  • Fruits
  • Chinese Herbs
  • Forest
  • Flowers and live potted plants
  • Livestock (by our external experts)
  • IPO case
  • Valuation of biological assets and agricultural companies for circular disclosure