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Accounting Standards for Private Enterprises

Agriculture

Summary

Currently, there is a significant diversity in practice regarding the accounting for biological assets.

Staff Contact(s)

Davina Tam, CPA, CA Principal, Accounting Standards Board

Phone number  +1 416 204 3514
Email address  [email protected]
Katherine Knowlton, CPA, CA Associate Director, Accounting Standards Board

Phone number  +1 416 204 3332
Email address  [email protected]

Project Status

  • Information gathering

    Completed prior to March 2012

  • Approving project

    The AcSB approved a research project in March 2012

    A standards-level project was approved in December 2016

  • Consulting stakeholders

    Discussion Paper issued December 2015

    Public outreach took place December 2015–January 2017

    Exposure Draft issued in July 2018

    Public outreach took place July 2016–November 2018

  • Deliberating feedback

    The AcSB has deliberated feedback on its Exposure Draft

  • Final pronouncement

    The final amendments were issued in the CPA Canada Handbook – Accounting in November 2019

Implementation

Read CPA Canada’s briefing detailing the new Standard and what factors to consider when applying it.

Read now

Read our non-authoritative guidance on how to apply the to apply the disclosure requirements for the net realizable value model in the new Standard.

Read now

News

March 22, 2023

Resource, Guidance

Section 3041, Agriculture – How to apply the disclosure requirements for the net realizable value model

Are you applying the new agriculture standard for private enterprises? Do you plan to measure your agricultural inventories using net realizable value? Read this easy-to-understand resource to support your financial statement preparation process.

March 8, 2016

News

CPA Magazine – Standards Digest – March 2016

March 8, 2016. CPA Magazine’s Standards Digest is a monthly snapshot into some of the latest standard-setting news and issues. This month, read about the AcSB’s Agriculture project and long-time PSAB Director Tim Beauchamp’s retirement.

December 9, 2015

Resource

Webinar – Explore the AcSB’s Discussion Paper on Agriculture

December 9, 2015. Tune in to this webinar on January 13, 2016 (French) and January 19, 2016 (English) to learn about the approaches that the AcSB is considering in how private enterprises should account for biological assets and agricultural produce.

Meeting & event summaries

February 22, 2023

Private Enterprise Advisory Committee Notes – February 2, 2023

The Private Enterprise Advisory Committee provided comments on a draft non-authoritative resource staff developed to help stakeholders apply certain disclosure requirements relating to the net realizable value model in Section 3041, Agriculture. Staff developed this resource considering recent stakeholder inquiries. Although the new standard is currently being implemented in practice, most Committee members viewed this resource as helpful and supported publishing it.

The AcSB will consider the feedback from its Private Enterprise Advisory Committee and its Agriculture Advisory Group then determine next steps in publishing this resource at the March 2023 Board meeting.

July 17, 2019

AcSB Decision Summary – July 17, 2019

The AcSB considered feedback on the fatal-flaw-review of Section 3041, Agriculture,and directed staff to make some minor clarifications.

The AcSB approved issuing the final standard, no later than the fourth quarter of 2019, subject to final drafting and a written ballot.

May 15, 2019

AcSB Decision Summary – May 15, 2019

The AcSB considered two outstanding issues with the Exposure Draft proposals and decided to clarify:

  • that agricultural producers must apply judgment to determine whether purchased agricultural produce is within the scope of the Section 3041, Agriculture, if it is not used in agricultural production; and
  • the unit of account for the amortization of productive biological assets.

The AcSB also reviewed draft revisions to the guidance reflecting its decisions to date and directed staff to begin the fatal-flaw-review process.

The AcSB plans to review a draft of the final standard in July 2019 and issue the final standard no later than the fourth quarter of 2019.

March 6, 2019

AcSB Decision Summary – March 6-7, 2019

The AcSB continued its discussion on the Exposure Draft, “Agriculture.” The Board considered advice from its Agriculture Advisory Group to address stakeholder feedback. The Board considered this feedback and decided to reflect the following changes from the Exposure Draft in the final standard:

  • Replace the condition that costs of disposal be “relatively insignificant” to measure agricultural inventories using the net realizable value model, with the condition that costs of disposal be “predictable and reliably measurable.”
  • Permit the accounting policy choice to determine cost using only input costs to be applied consistently to agricultural inventories measured using the cost model “of a similar nature and use,” rather than to “all” such agricultural inventories.
  • Permit a retrospective change to the accounting policy for the determination of cost from using full cost to only input costs.

The AcSB considered forestry industry concerns regarding the inclusion of the forestry industry’s activities within the scope of the proposed guidance. The Board decided to exclude forestry from the scope of the proposed standard on the following bases:

  • In Canada, the vast majority of managed forestry activities occur on publicly owned lands and as a result:
    • overy few private enterprises engage in forestry activities on private industrial lands; and
    • well-established practices in this industry stem from public policy and regulation.
  • There is a weak relationship between patterns of cost incurrence and expected future economic benefits due to the long-term nature of biological transformation in the forestry industry.

The AcSB also decided to make several clarifications to the final standard and to develop illustrative examples. In May 2019, it plans to consider outstanding issues and review a draft of the final standard reflecting its decisions to date.

The Board plans to issue the final standard no later than the fourth quarter of 2019.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.