Page 3 - 8. COMPILER QB - INDAS 41

SOLUTION

As at 31st March, 2017:

the mature plantation would have been valued at 17,100 (171 x 100).
As at 31st March, 2018:

the mature plantation would have been valued at 16,500 (165 x 100).
Assuming immaterial cash flow between now and the point of harvest, the fair value (and therefore the

amount reported as an asset on the statement of financial position) of the plantation is estimated as follows:
As at 31st March, 2017: 17,100 x 0.312 = 5,335.20.

As at 31st March, 2018: 16,500 x 0.331 = 5,461.50.

Gain or loss

The difference in fair value of the plantation between the two-year end dates is 126.30 (5,461.50 –
5,335.20), which will be reported as a gain in the statement or profit or loss (regardless of the fact that it
has not yet been realised).

Q2 (RTP May.21)

Analyse whether the following activities fall within the scope of Ind AS 41 with proper reasoning:
 Managing animal-related recreational activities like Zoo
 Fishing in the ocean
 Fish farming

 Development of living organisms such as cells, bacteria and viruses
 Growing of plants to be used in the production of drugs
 Purchase of 25 dogs for security purpose of the company’s premises.
Solution

Activity Whether in the Remarks
scope of Ind AS
41?

Managing animal No Since the primary purpose is to show the animals to
related-recreational public for recreational purposes, there is no management
activities like Zoo of biological transformation but simply control of the
number of animals. Hence it will not fall in the purview
of considered in the definition of agricultural activity.

Fishing in the ocean No Fishing in ocean is harvesting biological assets from
unmanaged sources. There is no management of
biological transformation since fish grow naturally in the
ocean. Hence, it will not fall in the scope of the
definition of agricultural activity.

Fish farming Yes Managing the growth of fish and then harvest for sale
is agricultural activity within the scope of Ind AS 41
since there is management of biological transformation
of biological assets for sale or additional biological
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