SOLUTIONS
AND DISCUSSIONS:
[See Accounting for Bearer Plants: Illustrative Problem]
In
June 2014 the IASB amended the scope of IAS 16 to include bearer plants related
to agricultural activity. This amendments are mandatory effective starting
January 1, 2016.
IAS
16.6 defines a bearer plant as a living plant that is: (1) is used in the production
or supply of agricultural produce; (2) is expected to bear produce for more
than one period; and (3) has a remote likelihood of being sold as agricultural
produce, except for incidental scrap sales.
Under
IAS 16, bearer plants will be measured initially at COST. Subsequently, these
items will be measured using either Cost Model (cost less any accumulated
depreciation and any accumulated impairment losses) or Revaluation Model (Revalued
amount less any subsequent accumulated depreciation and subsequent accumulated
impairment losses), depending on the entity’s accounting policy.
The
following chart summarizes the accounting treatment on Living Plants:
Thus,
using the amendments to IAS 16 and IAS 41, the following entries shall be
provided by the RENATA DE COCO CORPORATION for the year 2016:
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