IPSAS 27
Active
Agriculture
Prescribes the accounting for biological assets (except bearer plants) and agricultural produce, with both measured at fair value less estimated point-of-sale costs; produce at the point of harvest is measured at fair value less costs of disposal and recognised in profit or loss. Covers recognition, measurement, gains and losses, the inability to measure fair value reliably, the biological-asset reconciliation, and related disclosures. Effective 1 April 2011. (IAS 41 equivalent.)
Active Standard
IPSAS 27 Agriculture is the current, active standard issued by the IPSASB for accounting for biological assets (except bearer plants) and agricultural produce. Effective for periods beginning on or after 1 April 2011 (earlier application permitted). The current Standard comprises paras. 1–57.
IPSAS 27 is the IPSASB's adaptation of IAS 41 Agriculture for the public sector. The core regime – biological assets and produce at the point of harvest measured at fair value less estimated point-of-sale costs with changes in profit or loss – is retained, with public-sector commentary on 'agricultural activity' and explicit treatment of government grants under IPSAS 23 rather than within the Standard itself.
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Objective, Scope & Definitions (paras. 1–9)
Objective & scope
Prescribes the accounting treatment and disclosures for biological assets (except bearer plants), agricultural produce, and bearer plants used in agricultural activity. Requires both to be measured at FAIR VALUE less estimated POINT-OF-SALE costs, with changes in fair value recognised in profit or loss.
Key definitions
Biological asset
A living plant or animal – or a group – with bio-generative normality and a market, held for harvest as agricultural produce.
Agricultural produce
The harvested product of the entity's biological assets, measured at the point of harvest.
Scope (para. 3)
Applies to biological assets and agricultural produce – EXCEPT for trading livestock (carried at fair value through profit/loss under IPSAS 41) and agricultural activities conducted wholly underwater or in a greenhouse (see IPSAS 41 commentary).
Bearer plants ARE covered – but measured under IPSAS 17 (cost model) rather than this fair-value regime.
2
Biological Assets, Produce & Bearer Plants (paras. 10–16)
The measurement rule (para. 10)
ItemMeasurement
Biological assets (living)FV less estimated PO sale costs
Agricultural produce (harvested)FV less estimated PO sale costs at harvest
Bearer plantsCost model (IPSAS 17)
Costs of sale are deducted from FV – not recognised separately – because fair value is a market net-realisable value.
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Recognition & Measurement (paras. 17–26)
When to book (para. 17)
A biological asset is recognised when (a) it is probable that future economic benefits will flow and (b) it can be measured reliably – i.e., a market exists. Initial cost is not used; the asset is booked at its fair value on the day it is first recognised.
Probable future economic benefitsReliable fair-value measurementMarket-based, not cost-based
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Gains & Losses (paras. 27–34)
Goes to profit or loss (para. 27)
Changes in the fair value of a biological asset (less costs of sale) are recognised in profit or loss as they arise – EXCEPT for the portion relating to agricultural produce already included in the cost of sales (inventory) recognised on harvest, which is also in profit or loss.
Fair value gainOther income (P&L)Fair value lossLosses (P&L)
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Inability to Measure Fair Value Reliably (paras. 35–38)
Last-resort cost model (para. 35)
If fair value cannot be measured reliably, the entity measures the biological asset (and produce) at cost – the same measurement used for similar assets in other Standards. Disclose the reason and the amount.
This is an exception, not the rule: fair value is the default because agricultural markets are typically liquid.
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Disclosure – General & Descriptive (paras. 39–43)
Headline disclosures (para. 39)
The matterDisclosed
Accounting policyFV less costs of sale basis + exceptions
Methods & significant assumptionsHow fair value is determined
Risk exposureBearer-plant and market-price risks
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Reconciliation of Biological Asset Carrying Amounts (paras. 44–45)
Movement table (para. 44)
Reconcile opening to closing carrying amount: opening FV, purchases, sales, harvest, FV changes, and closing FV. Present in the same fair-value hierarchy as produce.
Separate line for each major biological asset category where practicable.
8
Current Value Measurement Disclosures (paras. 46–47)
Maturity bands (para. 46)
Disclose carrying amounts by expected timing of conversion to agricultural produce: <1 year, 1–2 years, 2–3 years, >3 years – so users see maturation and cash-flow timing.
9
Effective Date & Amendment Timeline
Timeline
DateEvent
Dec 2010Issued
1 Apr 2011Effective date
2025Amended (latest)
Aligned with IFRS 11 (service concession) commentary issued the same cycle.
10
Relationship to IAS 41
Mapping (para. 48)
IPSAS 27 mirrors IAS 41's fair-value-measurement approach but diverges on scope: bearer plants (IAS 41 para. 31) are measured at cost under IPSAS 17 in the IPSAS framework, and government grants on biological assets are excluded from IPSAS 27 and dealt with under IPSAS 23.
IAS 41 fair valueIPSAS 27 sameIAS 41 bearer plantsIPSAS 17 cost modelIAS 41 grantsIPSAS 23
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Statement / Process Mapping
Where it flows
ProcessLedger
Fair-value estimationFarm Manager → Asset Register (FV)
Gain/loss bookingValuation Reserve → P&L
ReconciliationHarvested Produce → Inventory → Cost of Sales
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Related Standards
See also
StandardRelation
IPSAS 17Bearer plants (cost model)
IPSAS 23Government grants on agriculture
IAS 41Direct equivalent
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Glossary
Biological asset
Living plant/animal held for harvest as agricultural produce.
Agricultural produce
Harvested product measured at the point of harvest.
Bearer plant
Plant that, after regular harvesting, continues to bear produce.
Fair value less costs to sell
Market price minus disposal costs.
Gains/losses
FV movements booked in profit or loss.
Maturity band
Carrying-amount split by expected harvest timing.