The Financial Reporting Council (FRC) has criticised the IASB's proposed amendments to two standards covering accounting for agricultural produce as too narrow in scope and has re-iterated its view that the definition of biological assets should be extended to cover livestock as well as plants.

The regulator's comments were made in its response on the exposure draft (ED) Proposed amendments to IAS 16 and IAS 41: Agriculture - Bearer Plants.

The FRC says it believes widening the scope of the standards to include livestock would improve the quality and consistency of financial reporting by better reflecting the business model of agricultural entities. It argues that introducing a different accounting model for bearer plants versus other biological assets reduces comparability for the user.

The FRC said it had already written to IASB in June 2012 and February 2013 regarding this project, pointing out that it disagreed with IASB's decision to pursue a definition of Bearer Biological Assets (BBAs) which is applicable only to plants and not to livestock.

In its latest response, the FRC said it support the proposal to account for bearer plants as property, plant and equipment in accordance with the requirements in IAS 16, rather than in accordance with IAS 41.

However, the regulator said it was aware of cases where livestock is held purely for breeding purposes and not for sale and said there was no reason why such biological assets should not also be able to apply the IAS 16 accounting treatment, arguing that this would lead to greater consistency across agricultural entities.

The FRC is now calling for a comprehensive review of IAS 41 starting from first principles.