Which entities need to apply IAS 41 regarding biological assets?

The correct choice identifies that IAS 41 applies specifically to entities that are engaged in the growing or rearing of biological assets. This encompasses a wide range of agricultural practices where biological assets, such as plants and animals, are the primary focus.

IAS 41 outlines the accounting for these biological assets, emphasizing the importance of their fair value measurement, which allows for a more accurate reflection of their current market conditions and potential future income generation. The standard is designed to enhance transparency and comparability across entities involved in agriculture, ensuring that they recognize their biological assets at fair value less estimated costs of point-of-sale.

In the context of agricultural activities, the standard encompasses not only those entities rearing animals, such as livestock, but also those that cultivate plants, fruits, and vegetables. This broad application is crucial as it reflects the diverse nature of the agricultural sector.

Meanwhile, the more limited choices focusing solely on specific groups, such as only entities rearing specific animals or using bearer plants, do not capture the comprehensive scope of IAS 41, which is designed to apply to all entities involved in biological assets rather than distinguishing between types of agricultural operations. This understanding reinforces the need for clear and consistent accounting practices across all agricultural entities that manage biological assets, contributing