When does an entity use the "cost less any depreciation" approach for biological assets?
A)At time of initial recognition upon acquisition.
B)If the entity cannot obtain fair value information.
C)At time of subsequent measurement on each balance sheet.
D)If the entity can obtain fair value information.

Question

Quizplus · Accepted Answer

The "cost less any depreciation" approach is used for biological assets when an entity cannot obtain fair value information. This may occur because the biological asset is unique and does not have a readily available market value, or because the cost of obtaining fair value information would be excessive relative to the benefits gained. Therefore, the entity would use historical cost less any accumulated depreciation as the basis for subsequent measurement of the biological asset.

When Does an Entity Use the "Cost Less Any Depreciation