Agriculture is one of the world’s largest industry. In some countries it is the mainstay of the gross domestic product. Yet until January 2003 when the IASB issued IAS 41 Agriculture, no major accounting standard setting body had issued a comprehensive pronouncement on this topic. IAS 41 introduced what some would say are radical changes in the way agricultural enterprises should account for biological assets.
Define biological assets and explain how IAS 41 requires them to be treated in the financial statements.