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CA Final · Financial Reporting · Ind AS 41 Agriculture

Gokul Dairy Farm holds 50 milch cows, with no purchases, sales or births during the year. At the start of the year each cow had a fair value of Rs 40,000 and estimated costs to sell of Rs 1,000. At year end each cow has a fair value of Rs 44,000 and estimated costs to sell of Rs 1,200. What gain on the herd is recognised in profit or loss for the year?

The gain is Rs 1,90,000. Biological assets are measured at fair value less costs to sell at each reporting date, with changes taken to profit or loss. Each cow moves from 39,000 to 42,800, a rise of 3,800, and across 50 cows this gives Rs 1,90,000.

  1. ARs 1,40,000
  2. BRs 1,90,000Correct
  3. CRs 2,00,000
  4. DRs 2,60,000

Explanation

Opening fair value less costs to sell is 40,000 - 1,000 = 39,000 per cow. Closing is 44,000 - 1,200 = 42,800 per cow. The change is 3,800 per cow, and 3,800 x 50 = Rs 1,90,000. Rs 2,00,000 ignores the change in costs to sell, and Rs 1,40,000 deducts the closing costs but not the opening costs.

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