Biological assets are dealt with in International Accounting standards 41 (IAS 41). As per IAS 41, biological assets are any living plant or animal owned by the business. These are typically measured at fair values minus the selling costs.
Recognition of Biological assets as per IFRS:
An entity recognizes a biological asset when the entity controls the asset as a result of past events. It is fairly reliable to say that benefit will flow to the entity, and fair value can be measured reliably.
Measurement of Biological asset:
Biological assets come within the scope of IAS 41. Initial recognition is done, and at subsequent reporting dates, the biological assets are recognized at fair value less estimated costs to sell, unless a fair value cannot be reliably estimated.
The gain on initial recognition of biological assets at fair value fewer costs to sell and changes in fair value fewer costs to selling biological assets during a period are included in profit or loss.
All other costs related to biological assets measured at fair value are recognized as expenses when incurred, other than costs to purchase biological assets.