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Bearer plants are an essential part of the economies of some countries, such as rubber in Malaysia, and wine-producing countries. ACCA agrees with much of what the IASB proposes, such as applying the principles of IAS 16 ‘Property, plant and equipment’ to bearer plants, including the option of adopting either a cost or revaluation model once the plants are mature and bearing produce. Whilst bearer plants reach maturity, they will be measured at accumulated cost, like a self-constructed manufacturing plant
—Paul Cooper, corporate reporting manager, ACCA

The IASB’s proposals to amend the accounting methods used to recognise a plant or tree used to generate produce (a ‘bearer plant’), have been welcomed by ACCA’s (the Association of Chartered Certified Accountants) Global Forum for Corporate Reporting

The current requirement to recognise bearer plants at fair value in financial statements is generally not an appropriate accounting method, in view of the function of these plants, said ACCA’s (the Association of Chartered Certified Accountants) Global Forum for Corporate Reporting. 

The forum explains these plants generate the produce sold by a company to generate revenue, and are not harvested each year as the produce itself.

After discussing the proposals with the forum, ACCA submitted its response to the International Accounting Standards Board (IASB’s) exposure draft on bearer plants.

Paul Cooper, ACCA’s corporate reporting manager, said: 'Bearer plants are an essential part of the economies of some countries, such as rubber in Malaysia, and wine-producing countries.

'ACCA agrees with much of what the IASB proposes, such as applying the principles of IAS 16 ‘Property, plant and equipment’ to bearer plants, including the option of adopting either a cost or revaluation model once the plants are mature and bearing produce. Whilst bearer plants reach maturity, they will be measured at accumulated cost, like a self-constructed manufacturing plant.

'How well plants will bear produce can vary over their life cycle, and ACCA believes that this can be reflected in a limited amount of fair value disclosures in the financial statements, whilst adopting the cost model for recognition of the bearer plant. 

'We also agree with IASB’s proposals that roots, such as sugar cane or rhubarb, should be accounted for in the same way as trees that produce fruit, as they can bear produce in more than one season, compared to annual crops where seeds need to be sown each time.

'However, more guidance is needed on the treatment of certain costs such as the rent of land where the bearer plant is growing, and even the impact of the condition of that land.'

Read ACCA’s full consultation response via the 'Related Links' section, left of this article.

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For more information, please contact 

Alana Sinnen, ACCA Newsroom
+ 44 (0) 207 059 5807
+44 (0) 7715 812120
alana.sinnen@accaglobal.com 

Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
helen.thompson@accaglobal.com 

Notes to Editors

  1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 
  2. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 89 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. 
  3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.