Solution for PWC Case Essay Sample

Review and Discuss the General Rules for Agricultural Produce Using US GAAP and IFRS Under International Accounting Standard ( IAS ) 41. we presume just value can be faithfully measured for a biological plus. or a life animate being or works. and IAS 41 requires measuring at just value less costs to sell ( FVLCTS ) from initial acknowledgment of biological assets up to the point of crop. The lone outlook to the given is when initial acknowledgment for a biological plus for which quoted market monetary values are non available every bit good as for which alternate carnival value measurings are determined to be clearly undependable. Under this state of affairs. IAS 41 requires an entity to mensurate that biological plus at its cost less any accrued depreciation and any accrued damage losingss. After the just value of such a biological plus becomes faithfully mensurable. the entity should mensurate the plus at its just value less costs to sell ( FVLCTS ) .

Additionally. biological assets that are physically attached to land are measured at their FVLCTS individually from the land.

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Furthermore. an entity shall supply information related to biological assets. such as a description of each group of biological assets. the footing for doing any such differentiations. and the nature of its activities affecting each group of biological assets. For inquiry figure three. we use just value less costs to sell ( net realizable value ) to value the stock list of biological assets. Under US GAAP. turning harvests and developing animate beings shall be valued at the lower of cost or market ( LCM ) ; animate beings available and held for sale and harvested harvests can be reported by this attack. excessively. These two points can besides be valued at gross revenues monetary value less estimated costs of disposal. if all the undermentioned conditions exist. harmonizing to the FASB Accounting Standards Codification: •The merchandise has a dependable. readily determinable. and realizable market monetary value. •The merchandise has comparatively undistinguished and predictable costs of disposal. •The merchandise is available for immediate bringing.

For inquiry figure three. we apply LCM attack straight to each point of TFI’s agribusiness stock list ( Except for wheat. which we should utilize the 2nd method under ASC905-330-35-3 to enter it. The conditions have been listed above. )

Explanations that are attached above tabular array
1. The agribusiness stock list entering under GAAP
Corn: There is no dependable and realizable market value or related information about maize. so there is no manner for us to foretell the Market Value for Corn. Therefore. in this instance we should merely enter the cost for maize. which is $ 95. 000. Wheat: In this instance. wheat is the harvested harvests ; under GAAP we should enter wheat on initial acknowledgment and at the terminal of the period. When we compare the market value of wheat and historical cost of it. harmonizing to GAAP. we should set to mensurate the stock list at the terminal of the period. so we should utilize the market value at the measuring day of the month. which is $ 6. 1 per bushel. and so subtract estimated cost of disposal 5 cents per bushel. We get: NRV=MV= gross revenues monetary value less estimated cost of disposal= ( 6. 1-0. 5 ) *600= $ 36. 300 Harmonizing to ASC905-330-35-3a/b and ASC905-330-35-4. since the wheat has a dependable and realizable market monetary value. and the cost of disposal is comparatively undistinguished and predictable ( comparing with its market value $ 6. 1. $ 0. 05 should be considered to be undistinguished ) . besides the wheat stored in TFI’s grain bins is clearly available for immediate bringing. It meets all the conditions that are listed in ASC905-330-35-3b.