Under the amendments, an entity can elect to measure bearer plants at cost. However, the produce growing on bearer plants will continue to be measured at fair value less costs to sell under the standard on agriculture.
The amendments simplify the measurement of bearer plants and will be welcomed by many companies and investors – particularly in Asia – who consider the current fair value accounting for bearer plants as being subject to too much uncertainty.
The amendments are effective for annual periods beginning on or after 1 January 2016. Early adoption is permitted.