Once biological assets become ready for sale, they effectively become inventory. Deemed cost in this case is fair value of the items less their selling costs. Subsequently they are valued at their fair value less costs to sell with gains and losses flowing to income.

Question

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This statement is correct. Once biological assets are ready for sale, they are treated as inventory and measured at deemed cost, which is the fair value less selling costs. Subsequently, they are measured at fair value less costs to sell, with gains and losses recognized in income.

Once Biological Assets Become Ready for Sale, They Effectively Become