薄大工程佬
2019-12-21 11:49:49
a). Why biological asset is non current asset and agriculture produce is current asset.
to know why one is classified as current asset and another is classified as non current asset you should understand the definition and criteria for asset classification
As per International Accounting Standard current asset means"assets expected to be realized within 12 months after the reporting period or held for sale or consumption in the normal course of the operating cycle or Held for trading purposes and includes Cash or a cash equivalent and shall be classified as current asset.
In present case agriculture produce held for consumption in business process therefore it is treated as current asset.
Biological Assets are assets that are living – for example, trees, animals, or cannabis and it is covered in current asset definition therefore it is treated as non current asset
b)
Ans:Yes,Grape vineyard is a living trees therefore it should be classified under biological asset and grape is a agriculture produce therefore as a current asset.
c)
Answer:Biological asset should be recorded at fair value at the end of a period therefore it affect other comprehensive income and the cost of harvesting affect net income.
d)
Answer:Yes net income would be increased by 85000 (60000 is a selling price and 25000 is a net realizable value )
e)
Answer:as per international accounting standard current asset should be recorded as net realizable value at the end of accounting period therefore agriculture produce should be recorded at net realizable value
Net realizable value is the value as on today in the market to arrive at NRV staff should identify value of product in the market.
