You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The managing director, who is not an accountant, has recently attended a business seminar at which financial reporting issues were discussed. Following the seminar, she reviewed the financial statements of Omega for the year ended 31 March 2016. Based on this review she has prepared a series of queries relating to those statements:

Query Two
‘Another issue discussed at the seminar was financial reporting by farming entities. The issue of ‘biological assets’ was
mentioned. I don’t really understand what these are or how they’re recognised and measured in the financial
statements. Please explain this to me.’ (5 marks)

Required:
Provide answers to the three questions raised by the managing director. Your answers should refer to relevant provisions of International Financial Reporting Standards.

Note: The mark allocation is shown against each of the three issues above.