What is Biological Assets?
Biological assets are living animals or plants held by an entity for sale, agricultural produce, or as additional biological assets. Under IAS 41, they are generally measured at fair value less costs to sell.
How It Works
- Identify biological assets (livestock, plantations).
- Measure at fair value less costs to sell each reporting date.
- Recognize fair-value changes in profit or loss.
Saudi Context
Saudi agribusinesses — dairy, poultry, aquaculture — apply IAS 41 to herds and crops. Vision 2030 food-security investments have grown the population of biological assets on Saudi balance sheets.
Example
A Saudi dairy company values its dairy herd at fair value of SAR 80 million and recognizes the SAR 4 million increase from last year in the income statement.