Ind AS 41, Agriculture, provides guidance on the recognition, measurement, and disclosure of agricultural activities and agricultural produce. The standard applies to entities that engage in agricultural activities, which involve the management of biological transformation and the harvest of biological assets for sale or for conversion into agricultural produce.
Under Ind AS 41, biological assets (living plants or animals) are recognized when they meet the definition of an asset and are under the control of the entity. These assets are initially measured at their fair value less estimated point-of-sale costs, and subsequent measurement depends on the nature of the biological asset.
Agricultural produce, which is the harvested product from biological assets, is measured at its fair value less estimated point-of-sale costs at the point of harvest. Any changes in the fair value of agricultural produce after harvest are recognized in profit or loss.
Ind AS 41 also provides guidance on the measurement and disclosure of government grants related to agricultural activity, the presentation of agricultural activity in the financial statements, and the recognition of income and expenses associated with agricultural activities.
Disclosure requirements include information about the nature of agricultural activities, measurement bases used, and the effect of biological assets on financial performance.
