BC111 IAS 41 currently requires bearer plants to be measured at fair value less costs to sell. Consequently, the requirement to measure fair value applies to both the bearer plant and the produce growing on the bearer plant. As a result of the amendments, only the produce growing on bearer plants will be measured at fair value less costs to sell.
BC112 The produce of bearer plants is usually grown for sale. Consequently, fair value changes in the produce have a direct relationship to the expectations of future cash flows that the entity will receive on sale. In contrast, bearer plants are normally held by an entity for the whole of their useful life and then scrapped, so changes in fair value are not directly recognised as cash flows on sale of the bearer plants. Consequently, the Board thinks that providing separate fair value information for the produce is likely to improve the ability of users of the financial statements to assess future cash flows.
BC113 During the project the staf
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