05-20-2011, 12:38 AM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Dard</i>
<br />According to the financial reporting framework, trees can be capitalised if they bring economic resources to the entity. This, for example, will be the case when the company is a furniture manufacturer and has its own trees. The trees in this case will bring revenue in the form of finished furniture.
One criteria may be hard to apply reliable estimate of the value of trees.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
I tend to disagree.
In case of business of furniture (if it is taken in such a sense; though I disagree on this as well) the trees should have to be treated as 'inventories' and not as "property, plant and equipment (fixed assets)".
Now, even if these are treated as "inventories", the relevant standard i.e. IAS-2 specifically excludes all Biological Assets from its ambit and asks to follow IAS-41 for their treatment.
In the entire set of IFRSs (the framework which we follow at Pakistan) the trees have not been categorized under any other form of assets except the "Biological Assets".
Certainly I am not referring any financial reporting framework other than IFRSs.
Regards,
<br />According to the financial reporting framework, trees can be capitalised if they bring economic resources to the entity. This, for example, will be the case when the company is a furniture manufacturer and has its own trees. The trees in this case will bring revenue in the form of finished furniture.
One criteria may be hard to apply reliable estimate of the value of trees.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
I tend to disagree.
In case of business of furniture (if it is taken in such a sense; though I disagree on this as well) the trees should have to be treated as 'inventories' and not as "property, plant and equipment (fixed assets)".
Now, even if these are treated as "inventories", the relevant standard i.e. IAS-2 specifically excludes all Biological Assets from its ambit and asks to follow IAS-41 for their treatment.
In the entire set of IFRSs (the framework which we follow at Pakistan) the trees have not been categorized under any other form of assets except the "Biological Assets".
Certainly I am not referring any financial reporting framework other than IFRSs.
Regards,
