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CA Final · Financial Reporting · Ind AS 41 Agriculture

Gopal Dairy Farm holds a herd of 50 goats, all unchanged in number during the year. At the start of the year each goat had a fair value of Rs 8,000 and estimated costs to sell of Rs 400. At the year end each goat has a fair value of Rs 9,000 and estimated costs to sell of Rs 450. No other changes occurred. What gain does Gopal Dairy Farm recognise in the year in respect of the herd, and where?

The gain is Rs 47,500, recognised in profit or loss. Biological assets are measured at fair value less costs to sell. The carrying amount moves from Rs 3,80,000 to Rs 4,27,500, and the change goes to profit or loss, not OCI.

  1. ARs 47,500 in profit or lossCorrect
  2. BRs 50,000 in profit or loss
  3. CRs 52,500 in profit or loss
  4. DRs 47,500 in other comprehensive income

Explanation

Opening carrying amount is 50 × (8,000 − 400) = Rs 3,80,000. Closing carrying amount is 50 × (9,000 − 450) = Rs 4,27,500. The change of Rs 47,500 is recognised in profit or loss. Rs 50,000 ignores the rise in costs to sell, and Ind AS 41 does not take such gains to OCI.

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