ACCOUNTING STANDARDS FOR PRIVATE ENTERPRISES BRIEFING ON SECTION 3041, AGRICULTURE
Tuesday, August 16, 2022
by: Introduction and Project Background

Section: Accounting & Tax


What types of entities and transactions are within the scope of Section 3041?

Section 3041 establishes standards for the recognition, measurement, presentation and disclosure of an agricultural producer’s agricultural inventories and productive biological assets. It applies to transactions or events related to agricultural production, including the purchase of the harvested product of biological assets for use in agricultural production. An enterprise must be an agricultural producer in order to apply the guidance in Section 3041.
On November 1, 2019, the Accounting Standards Board (AcSB) released Section 3041, Agricul ture, in Part II of the CPA Canada Handbook – Accounting (Handbook) (Accounting Standards for Private Enterprises (ASPE)). Prior to the introduction of Section 3041, there was no specific authoritative guidance for agricultural producers included in Part II of the Handbook. Accord ingly, there was significant diversity in accounting by private enterprises for biological assets and harvested products of biological assets. The purpose of Section 3041 is to provide authori tative guidance on accounting for biological assets and to eliminate this diversity.

The agricultural sector is an important part of the Canadian economy, and it spans a wide range of activities. Statistics Canada reported that in 2016, agricultural and agri-food sectors generated $111.9 billion in gross domestic product (GDP) and accounted for 6.7 percent of Canada’s GDP,1 and that there were 193,492 farm businesses.

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