Biological Assets

Biological Assets records living plants and animals a business holds to produce goods: dairy cows, poultry, fish stock, tea bushes, orchards. NFRS measures them at fair value less costs to sell, so the balance is revalued at each year end and the change goes to Gain from Changes in Fair Value of Biological Assets on the income side or to an expense when value falls. Feed, veterinary and labour costs are expenses; the purchase of the animals or plants, and their growth, is what moves this account. Harvested produce such as milk or tea leaves becomes stock at that point. A travel or trading company never needs this ledger; a Chitwan farm or a tea estate in Ilam does.

Balance = Fair value less costs to sell at the reporting date; Year-end change = New fair value - Carrying value.

1. 01Go to Invoicing > Journal Entry > New dated the purchase; debit Biological Assets, credit the bank or supplier.
2. 02Submit. The entry above posts for twenty dairy cows.
3. 03Post running costs such as feed and vet fees to expense accounts, not to this ledger.
4. 04At Ashadh end, post the auditor's fair value change by Journal Entry against the fair value gain account.
5. 05Open the ledger from Accounts Setup > Chart of Accounts to read the carrying value.

Post by Journal Entry when bought or when revalued at year end. Not used by a travel company; relevant to farms and agro businesses.

Dr Biological Assets Rs 6,00,000, Cr Bank Account Rs 6,00,000 for twenty dairy cows bought by a Chitwan farm.