PAS 41 - Agriculture

1. Where there is a long aging or maturation process after harvest, the accounting for such products should be dealt with by

a. PAS 41.

b. PAS 2, Inventories.

c. PAS 16, Property, Plant, and Equipment.

d. PAS 40, Investment Property.

2. Which of the following costs are not included in costs to sell?

a. Commissions to brokers and dealers.

b. Levies by regulatory agencies.

c. Transfer taxes and duties.

d. Transport and other costs necessary to get the assets to a market.

3. Entity A had a plantation forest that is likely to be harvested and sold in 30 years. The income should be accounted for in the following way:

a. No income should be reported until first harvest and sale in 30 years.

b. Income should be measured annually and reported using a fair value approach that recognizes and measures biological growth.

c. The eventual sale proceeds should be estimated and matched to the profit and loss account over the 30-year period.

d. The plantation forest should be valued every 5 years and the increase in value should be shown in the statement of recognized gains and losses.

4. Generally speaking, biological assets relating to agricultural activity should be measured using

a. Historical cost.

b. Historical cost less depreciation less impairment.

c. A fair value approach.

d. Net realizable value.

5. Which of the following is not dealt with by PAS 41?

a. The accounting for biological assets.

b. The initial measurement of agricultural produce harvested from the entity's biological assets.

c. The processing of agricultural produce after harvest.

d. The accounting treatment of government grants received in respect of biological assets.

6. Where the fair value of the biological asset cannot be determined reliably on initial recognition, the biological asset should be measured at

a. Cost.

b. Cost less accumulated depreciation.

c. Cost less accumulated depreciation and accumulated impairment losses.

d. Net realizable value.