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Deloitte comment letter on IASB ED/2013/8 'Agriculture: Bearer Plants'

Published on: 28 Oct 2013

Deloitte Touche Tohmatsu Limited has responded to the International Accounting Standards Board’s (the IASB) Exposure Draft ED/2013/8 Agriculture: Bearer Plants.

We welcome the IASB’s proposed amendment to measure bearer plants using either a cost or revaluation model under IAS 16 Property, Plant and Equipment rather than the fair value less costs to sell model under IAS 41 Agriculture.

We agree with the principal reasoning provided by the IASB supporting this amendment; that is bearer plants, once mature, no longer undergo significant biological transformation. This is why bearer plants are similar to manufacturing plant and should, therefore, be subject to the same measurement requirements.  Accordingly, we support the proposed amendments in the exposure draft, subject to a number of comments.

We believe that the IASB should further consider the scope of this amendment and specifically that further consideration be given to whether the proposed amendments be extended to livestock that is held for production rather than for its own carcass, for example sheep for wool, chicken and ducks for eggs and dairy cattle for milk. The existence of an active market for bearer livestock that provides a reliable fair value does not alter the nature of these types of biological asset and hence we see no reason in principle why the rationale underlying the proposed amendment to the measurement of bearer plants should not also apply to bearer livestock. We do not see any immediately compelling reason to distinguish between these two types of biological assets.

Download the full comment letter below.


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