Is It Farming or Just Animals? The Classification Trap in IAS 41

IAS 41 does not apply simply because something is alive. The key question is why the business holds the asset and whether it is managing biological transformation for profit. The same animal can fall under completely different standards depending on its purpose, and once agricultural activity is confirmed, correct classification becomes critical. Consumable assets, bearer assets, plants, animals, and harvested produce all follow different accounting paths, and a mistake at this stage distorts every number that follows.