How is income and expense recognized for biological assets under IFRS?
A)Changes in fair value.
B)Percentage of completion method.
C)Completed contract method.
D)Cash basis.

Question

Quizplus · Accepted Answer

Under IFRS, income and expense for biological assets is recognized based on changes in fair value. This means that the value of the biological asset is revalued at the end of each accounting period and any change in value is recognized as income or expense. This approach is consistent with the principle of fair value accounting, which requires that assets and liabilities be measured at their fair value on the balance sheet. The percentage of completion and completed contract methods are typically used for recognizing revenue and expenses for construction contracts, while the cash basis method is not appropriate for recognizing income and expenses for biological assets.

How Is Income and Expense Recognized for Biological Assets Under