Business Management

1. Which of the following shall IAS 41 be applied to?

A. Bearer plants related to agricultural activity

B. Agricultural produce at the point of harvest

C. Land related to agricultural activity

D. All of the above

2. Agricultural produce is the harvested produce of the entity’s biological assets.

A. True

B. False

3. Which of the following does define “bearer plant”?

A. A living plant that is used in the production or supply of agricultural produce

B. A living plant that is expected to bear produce for more than one period

C. A living plant that has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales

D. A and C

E. All of the above

4. Agricultural activity is the management by an entity of the biological transformation and harvest of biological assets for __________.

A. Sale

B. Conversion into agricultural produce

C. Conversion into additional biological assets

D. A and B

E. All of the above

5. Which category would he wool fall under while it is still on the sheep in case of a sheep ranch?

A. Biological assets

B. Agricultural produce

C. Products resulting from processing after harvest

D. Unmanaged stock

6. Where should a company recognize gains or losses arising in the period on: initial recognition of a biological asset at the fair value less costs to sell; and from a change in fair value less costs to sell recognized?

A. Both in comprehensive income

B. Both in profit or loss

C. In other comprehensive income; in profit or loss

D. Both in profit or loss unless the fair value measurement is clearly not reliable

7. Which of the following assumptions is correct?

A. The land on which the sheep grazed falls within the scope of IAS 41

B. The wool growing on the sheep falls within the scope of IAS 41

C. Wool sheared from the sheep and ready for further processing falls within the scope of IAS 41

D. The woolen yarn made from the wool falls within the scope of IAS 41.

8. Regarding the recognition of the wool before harvest: can the wool be recognized separately from the sheep? In other words, do the sheep have their own value, and does the wool growing on the sheep have its own value?

A. Yes, absolutely.

B. No, they’re recognized as the same thing.

C. It depends on volume of wool.

D. It’s entirely up to the owner of the wool.

9. Can we measure the wool growing on the sheep at the point of harvest on a basis other than fair value less costs to sell?

A. No, never.

B. Yes, if the market is falling.

C. Yes, if they’re ready for harvest.

D. Yes, when there is inability to measure fair value reliably, as discussed in IAS 41.30

10. The sheep ranch has a contract with a company to supply half of the harvest (wool) at €200 per tone (of wool). Can these contract prices be used instead of fair value when measuring the value of the wool at the point of harvest?

A. Only if the current market value is above €200.

B. Yes, in any circumstance.

C. No, under no circumstances.

D. No, unless the fair value cannot be measured reliably.