Biological Assets Definition
Biological Assets are living Assets that a company will own.
The term Biological Assets refers to assets owned by a company that are living and will typically comprise of plants and animals. These Biological Assets will be found on the balance sheet and are especially important for farming businesses or for those whose primary source of generating profits comes as a by-product of a Biological Asset.
The use of Biological Assets will be applicable especially to companies within the following industries; Agriculture, Paper, Dairy, Cannabis, CBD, Meat and farming. Some examples of Biological Assets include; Animals (cows, goats, sheep), Crops, Plants, Trees and more.
A fundamental part of Biological Assets would be the expectation for them to bear produce or in some way become consumable, making them ready to be sold or processed in some way further to bring benefit to the company. As such any animals or plants not intended for business purposes i.e. pets, would not be classified as a company’s Biological Assets.