These standards are established in accordance with the Basic Standard for Enterprise Accounting and specify the recognition, measurement, and disclosure of biological assets related to agricultural production. Biological assets refer to living animals and plants.
I. Classification of Biological Assets
Consumable biological assets
Biological assets held for sale or to be harvested as agricultural produce, including growing field crops, vegetables, timber forests, and livestock held for sale.
Biological assets for production
Biological assets held for producing agricultural products, providing services, or renting out. Includes economic forests, fuelwood forests, breeding livestock, and working animals.
Public Welfare Biological Assets
Biological assets primarily for protection and environmental conservation, including windbreak forests, soil and water conservation forests, and water source涵养 forests.
2. Recognition and Initial Measurement
Biological assets are recognized only when they meet all of the following conditions:
- (1) The enterprise owns or controls the biological asset as a result of past transactions or events.
- (2) It is probable that the economic benefits or service potential associated with the biological asset will flow to the enterprise.
- (3) The cost of the biological asset can be measured reliably.
Biological assets shall be initially measured at cost. Acquisition cost includes the purchase price, related taxes, transportation fees, insurance premiums, and other expenditures directly attributable to acquiring the asset.
3. Subsequent Measurement
Depreciation of productive biological assets
Producers shall depreciate productive biological assets on a periodic basis once they reach their intended production or business purpose. Depreciation methods may include straight-line, units-of-production, or output-based approaches.
Impairment handling
- • Consumable biological assetsRecognize impairment when net realizable value falls below carrying amount; reverse previously recognized impairment if the factors causing it no longer exist.
- • Biological assets for productionIf the recoverable amount is lower than the carrying amount, recognize an impairment loss. Once recognized, it shall not be reversed.
- • Public Welfare Biological Assets: No impairment provision made
Fair Value Measurement:Biological assets shall be measured at fair value if there is reliable and continuous evidence of their fair value. This requires both an active market for the asset and the ability to obtain market prices and other relevant information for similar or identical biological assets from that market.
4. Gains and Disposal
- • Consumable biological assets: Costs are recognized at their carrying amount upon harvest or sale.
- • Agricultural products harvested from productive biological assets: Costs are determined based on necessary expenditures incurred during production or harvest.
- • Cost of biological assets after change in use: determined based on the carrying amount at the time of the change.
- • Upon sale, loss, death, or damage of biological assets: recognize the balance after deducting carrying amount and relevant taxes and fees from disposal proceeds in current profit or loss.
V. Disclosure Requirements
- • Categories of biological assets, along with their physical quantities and carrying values
- Accumulated amount of provision for decline in value of various consumable biological assets
- • Useful lives, estimated net residual values, depreciation methods, accumulated depreciation, and cumulative impairment provisions for various productive biological assets
- • Categories, acquisition methods, and physical quantities of biogenic assets with natural origins
- • Carrying amount of biological assets pledged as collateral
- • Risks Related to Biological Assets and Management Measures
Regulatory Document Attachment
CAS No. 5 — Biological Assets (PDF)