Biological Assets

BIOLOGICAL
ASSETS
QUIZBOWL
QUESTIONNAIRES
Question
1:
According to IASB, bearer plants
are accounted for as?
THEORY TYPE 3
Question
2:
The measurement of biological
assets involved in agricultural
activities should be based on?
THEORY TYPE 4
PROBLEM 1
On January 1, Dream Farm purchased 150 cows which are 2 years old for P12,000
each for the purpose of producing milk for local ice cream producers. On June 30,
the cows gave birth to 45 calves.
Fair value less costs to sell of the assets are as follows :
Newborn calf on June 30 4,000
Newborn calf on December 31 5,000
½ year old calf on December 31 7,000
2 years old cow on December 31 15,000
3 years old cow on December 31 18,000
5
Question:
What amount should be reported as the
change in fair value of the cows and
calves on December 31?
6
PROBLEM 2
Hogwarts corp. A forest plantation at a lumpsum amount 0f 9,500,000.
This plantation includes land, fences, trees and plants. The fV of the land
and fences are determinable which is 4,500,000 and 3,000,000
respectively.
Question:

If there is no market value available for the trees and plants, how
much is to be reported a biological assets in Hogwarts corporation
balance sheet.
7
Question
3:
Where the fair value of the biological
asset cannot be determined reliably, the
biological asset is measured at?
THEORY TYPE 8
Question
4:
It is the management by an entity of the
biological transformation and harvest of
biological assets for sale or for conversion into
agricultural produce or into additional
biological asset?
THEORY TYPE 9
PROBLEM 3:
Hermione Company is engaged in raising dairy livestock. Information regarding its
activities relating to the diary livestock is as follows:
▫ Carry amount on January 1, 2020 4,000,000

▫ Increase due to purchases 1,500,000
▫ Gain arising from change in fair value less
▫ cost disposal attributable to price change 300,000
▫ Gain arising from change in fair value less
cost disposal attributable to physical change 600,000
▫ Decrease due to sales 850,000
▫ Decrease due to harvest 200,000 6
Question:
What is the carrying amount of the
biological asset on December
31,2020?
11
PROBLEM 4:
At the beginning of the current year, Mars Company purchased a vineyard
costing P12,000,000. It was determined that the grape vines can produce fruit
for a period of 8 years.
During the year, the entity harvested grapes with a fair value less cost of
disposal of P4,000,000. By the end of the year, the grapes were sold
P7,000,000. The entity incurred operating expenses of P1,000,000. The entity
used the perpetual method.
Question:
What is the pre-tax net income? 8
Question
5:
If a government grant related to a biological assets
measured at cost less any depreciation and
impairment, what is the specific accounting
provisions/standard government grant?
THEORY TYPE 13
PROBLEM 5:
Vincenzo Company provided the following data:
Value of biological asset at acquisition cost on December 31, 700,000
2019
Fair valuation surplus on initial recognition at fair value on 800,000

December 31, 2019
Change in fair value to December 31, 2020 due to growth and 200,000
price fluctuation
Decrease in fair value due to harvest in 2020 100,000

Question:
What is the carrying amount of the biological asset
on December 31, 2020? 9
Question
6:
Generally speaking, biological
assets relating to agricultural
activity shall be measured using?
THEORY TYPE 15
PROBLEM 6:
Dan Tae Company provided the following information for the current year:
Cash 1,000,000
Trade and other receivables 1,300,000
Inventories 150,000
Dairy Livestock-mature 780,000
Property, Plant and Equipment 390,000
Fair value of Milk produced 600,000
Dairy Livestock-immature 1,570,000
Gain from change in fair value 400,000 10
Question:
What is the fair value of
biological assets at year-end?
17
PROBLEM 7:
Marquez Company provided the following assets in a forest plantation and
Farm:
Free Standing Trees 5,000,000
Land Under Trees 800,000
Road in forest 500,000
Animals related to recreational activities 1,000,000
Bearer Plants 2,000,000
Bearer Animals 3,000,000
12
Question:
What is the total amount of
Assets should be classified as
biological assets?
19
PROBLEM 8:
Glenn company produced milk for sale to local and national ice cream
producers. The entity began operations at the beginning of current year by
purchasing 500 milk cows for 5,000,000 The entity provided the following
information for the current year.
Acquisition cost, jan1 - 5,000,000 Change in the fair value due to growth and
price changes - 2,000,000 Decrease in fair value due to harvest 500,000 Milk
harvested during the year but not yet sold - 200,000
Question:
What amount of gain on change in fair value should be
recognized for biological assets in the current year? 14
PROBLEM 9:
Crista Company provided the following data:
Value of biological asset at acquisition cost 670,000
On Dec. 31, 2018
Fair value surplus on initial recognition at fair value 400,000
On Dec. 31, 2018
Change in Fair value to Dec. 31, 2019 due to growth 69,000
Decrease in fair value due to harvest in 2019 10,000
Question:
What amount of net gain from change in fair value of
Biological Asset should be reported in the 2019 income 15
statement?
Question
7:
It is defined as the price that
would be received to sell an
asset?
THEORY TYPE 22
PROBLEM 10:
On January 1, 2015, Mheyn Company planted trees on its land. The
entity purchased the land two years ago at a cost of P2,000,000. The
trees were considered bearer plants and had accumulated cost of
P750,000 on December 31, 2019.
By January 1, 2020, the trees had matured and were expected to bear
produce for a period of 5 years. On December 31, 2020, the trees
produced fruit and the fair value less cost of disposal on such date was
P60,000. There was no harvest during 2020. On December 31, 2021,
the fruits were harvested and the fair value less cost disposal on such
date was P80,000. 16
Question:
What amount on gain from change in
fair value is recognized for the
agriculture produce for the year
ended December 31, 2021?
24
Question
8:
Animals related to recreational
activities are classified as?
THEORY TYPE 25
Question
9:
Which of the following is unlikely to be used in
fair value measurement of biological assets?
a. Quoted market price
b. The most recent market transaction price
c. The present value of the expected net cash flows
d. External independent valuation

THEORY TYPE 26
Question
10:
Biological Assets are
measured at?
THEORY TYPE 27
Jera Camille H. Sarsagena
Christy Ann C. Suquib
Cloney N. Mabulac
Rugine G. Collamar
Whoa! That’s a big

Carissa Isabel number, aren’t you proud?
C. Reyes
Adrienne G. Bilagantol
Aiko M. Maguinsawan
Glenn C. De Torres 28

Biological Assets

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BIOLOGICAL

▫ Carry amount on January 1, 2020 4,000,000

Fair valuation surplus on initial recognition at fair value on 800,000

Decrease in fair value due to harvest in 2020 100,000

Christy Ann C. Suquib

Whoa! That’s a big

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