Bearer plants

An orchard or vineyard is a long-lived productive asset, much like a factory: it produces a crop every year for decades, and the value lies in the fruit, not in the trees as timber. Before 2016, IAS 41 required the trees to be revalued to fair value every year, which produced volatile results that did not match how growers ran their businesses. This guide explains which plants qualify as bearer plants, works through an orchard from planting to production, and covers the produce on the plants, revaluation, impairment, replanting and US GAAP.

By Mirza Fahad Baig, Chartered Accountant. Reviewed by Hamza Fida, Chartered Accountant. 4 minute read.

Short answer

Bearer plants are living plants used only to produce agricultural produce over more than one period, such as fruit trees, grape vines, tea bushes, rubber trees and oil palms, where the chance of selling the plant itself as produce is remote. Since 2016 they are accounted for under IAS 16 as property, plant and equipment: the costs of planting and growing them until they are mature are capitalised, like a self-constructed asset, and the plants are then depreciated over their productive life, at cost or under the revaluation model. The produce growing on them, the fruit, grapes or leaves, remains a biological asset under IAS 41, measured at fair value less costs to sell until harvest. In this guide's example, an apple orchard costing US$ 1,200 thousand to bring to maturity is depreciated at 60 thousand a year.

At a glance

Definition
Plants used only to bear produce
Standard
IAS 16, not IAS 41
Before maturity
Costs capitalised
After maturity
Depreciated over productive life
Produce on the plants
IAS 41 at fair value
Bearer animals
Not included; stay in IAS 41
Bearer plantsDefinition: Plants used only to bear produce; Standard: IAS 16, not IAS 41; Before maturity: Costs capitalised; After maturity: Depreciated over productive life; Produce on the plants: IAS 41 at fair value; Bearer animals: Not included; stay in IAS 41.KEY FACTS AT A GLANCEBearer plantsDefinitionPlants used only to bearproduceStandardIAS 16, not IAS 41Before maturityCosts capitalisedAfter maturityDepreciated overproductive lifeProduce on the plantsIAS 41 at fair valueBearer animalsNot included; stay in IAS41Tax BakersBearer plantsDefinition: Plants used only to bear produce; Standard: IAS 16, not IAS 41; Before maturity: Costs capitalised; After maturity: Depreciated over productive life; Produce on the plants: IAS 41 at fair value; Bearer animals: Not included; stay in IAS 41.KEY FACTS AT A GLANCEBearer plantsDefinitionPlants used only to bear produceStandardIAS 16, not IAS 41Before maturityCosts capitalisedAfter maturityDepreciated over productive lifeProduce on the plantsIAS 41 at fair valueBearer animalsNot included; stay in IAS 41Tax Bakers
Key facts at a glance, as set out in this guide.

Which plants are bearer plants?

A bearer plant is a living plant that is used in the production or supply of agricultural produce, is expected to bear produce for more than one period, and has only a remote likelihood of being sold as agricultural produce, other than incidental scrap sales such as old trees sold for firewood. Fruit and nut trees, grape vines, tea bushes, coffee plants, rubber trees and oil palms usually qualify. See palm oil plantations. Plants grown to be harvested themselves, such as trees grown for timber, and annual crops such as wheat or maize, do not; nor do plants grown both for their fruit and for sale as timber, where that sale is more than remote. Bearer animals, such as dairy cows, are excluded and stay in IAS 41. See biological assets at fair value.

Bearer plants: an apple orchard

A grower plants a new apple orchard. Preparing the land, buying and planting the trees, irrigation, pruning, fertiliser and labour cost US$ 400, 450 and 350 thousand over the three years before the orchard becomes productive. It is then expected to bear fruit for 20 years.

Costs of the orchard before maturity (US$ thousand)Costs of the orchard before maturity (US$ thousand)400Year 1450Year 2350Year 3Capitalised as immature bearer plants
Costs are capitalised until the trees bear fruit, then depreciated.

The 1,200 thousand is capitalised as immature bearer plants, like an asset under construction, and not depreciated until the trees reach maturity. From maturity, the orchard is depreciated straight-line over 20 years, 60 thousand a year, unless a units of production basis better reflects the expected yield curve. The cost of the land is accounted for separately and not depreciated. Costs that do not bring the plants to maturity, such as general farm overheads and abnormal losses from frost, are expensed.

How is the fruit on the trees accounted for?

The apples growing on the trees are biological assets under IAS 41 until harvest. At the year end, with the fruit part-grown, the grower estimates its fair value less costs to sell: expected harvest value of 500 thousand, less 120 thousand of costs still to grow and pick, less 80 thousand for the risk of weather and pests and a return on the trees and land that help produce it, giving 300 thousand, recognised as a biological asset with the gain in profit or loss. At harvest, the apples are measured at fair value less costs to sell and become inventory. See crops and the point of harvest.

Can bearer plants be revalued?

Yes. As with any class of property, plant and equipment, the grower can choose the revaluation model, carrying the plants at fair value less subsequent depreciation, with increases in other comprehensive income and decreases in profit or loss to the extent they reverse earlier increases. Fair value is often hard to separate from the land and the produce, so valuers typically value the whole orchard or estate and deduct the land and the produce. Most growers use the cost model.

When are bearer plants impaired or replaced?

Disease, drought, a collapse in the price of the crop or a decision to grub up a variety are impairment indicators under IAS 36. Plants are usually tested with the land and other assets that generate cash flows together, such as a whole estate. When old plants are replaced, the remaining carrying amount of the removed plants is derecognised, and the cost of the new planting is capitalised until it matures. Replanting a few trees each year as part of normal maintenance is expensed. See IAS 16 explained.

What about grants for planting?

Grants for establishing bearer plants relate to assets measured at cost, so they follow IAS 20, not IAS 41: they are deducted from the cost of the plants or presented as deferred income and recognised over the plants' useful life. See grants for agriculture.

How does US GAAP differ?

Under ASC 905, costs of developing orchards, vineyards and groves before they produce in commercial quantities are capitalised and then depreciated over their productive lives, so the treatment of the plants is broadly similar to IAS 16. The difference is the produce: US GAAP carries growing crops at cost, while IFRS measures them at fair value less costs to sell. See agriculture accounting.

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Questions people ask

What are bearer plants under IFRS?

Living plants used only to produce agricultural produce over more than one period, with a remote likelihood of being sold as produce, such as fruit trees, vines, tea bushes and oil palms.

How are bearer plants measured?

Under IAS 16: costs are capitalised until maturity, then depreciated over the productive life, under the cost or revaluation model.

Is the fruit on bearer plants also under IAS 16?

No. Produce growing on bearer plants is a biological asset under IAS 41, at fair value less costs to sell until harvest.

Are trees grown for timber bearer plants?

No. Plants grown to be harvested as produce, such as timber, stay in IAS 41.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IAS 16 Property, Plant and Equipment
  2. IFRS Foundation: IAS 41 Agriculture
  3. FASB Accounting Standards Codification: Topic 905, Agriculture

Rules and fees change. If you are reading this long after October 9, 2026, confirm the figures with the source before you rely on them.

AgricultureAgriculture accounting: the key IFRS issuesAgricultureBiological assets at fair valueAgricultureCrops and the point of harvest

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This guide is general information. It is not tax or legal advice for your situation.