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Important Stuff on Ind AS 41, Agriculture

Indian Accounting Standard (Ind AS) 41, Agriculture, Important Material

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Ind AS 41: Agriculture

There was a greater need of financial statements based on sound and generally acceptable principles. As the use of a historic cost model was not seen as wholly appropriate for accounting for agricultural activity, the IASB issued IAS 41 based on a fair value model.

Most of the business organization involved in agricultural activities is generally small, cash-oriented and family-oriented. These small agricultural entities also seek outside financial assistance, mainly from banks or government agencies and are required to produce financial statements.

In India, the agricultural activity is not considered a business and also exempt from income-tax being the state subject as per Indian Constitution. Therefore, no need was felt to develop the accounting standards on agricultural activity. As India is converging with the IFRS, the corresponding Ind AS-41 was issued to IAS-41.


The objective of this Standard is to prescribe the accounting treatment and disclosures related to agricultural activity.


This Standard shall be applied to account for the following when they relate to agricultural activity:
(a) biological assets;
(b) agricultural produce at the point of harvest; and
(c) government grants covered by paragraphs 34 and 35 of this standard.

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