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Can I use cost approach to estimate the fair value of biological assets in accordance with HKAS 41?

Can I use cost approach to estimate the fair value of biological assets in accordance with HKAS 41?

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Daniel
 

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Yes. Cost may sometimes approximate fair value, particularly when: (1) little biological transformation has taken place since initial cost incurrence (for example, for fruit tree seedlings planted immediately prior to a balance sheet datethe end of a reporting period); or (2) the impact of the biological transformation on price is not expected to be material (for example, for the initial growth in a 30-year pine plantation production cycle).

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Barry
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