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Bearer plant is any living plant (i.e. biological asset) that satisfies the following condition:
1) Used in the production or supply of agricultural produce.
2) is expected to produce for more than one period and
3) has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.
Bearer plants are accounted for under IAS 16 and measured at cost at initial recognition or revaluation. All other biological plants are accounted for under IAS 41 and measured at fair value.
This is because bearer plants are used solely to grow produce and was therefore in the nature of manufacturing. Hence applying IAS 41 and fair value measurement for the same was found to be less appropriate.
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