4. SIGNIFICANT ACCOUNTING POLICIES: e) Biological assets (Policies)
|12 Months Ended|
Dec. 31, 2020
|e) Biological assets||
The Companys biological assets consist of hemp plants which are valued at fair value less cost to sell. Their fair value is determined using the income approach. The Company measures and adjusts the biological assets to the fair value less cost to sell up to the point of harvest, which becomes the basis for the cost of finished goods inventories after harvest.
Production costs include all direct and indirect costs relating to biological transformation, which are capitalized to biological assets as they were incurred on the consolidated statements of loss and comprehensive loss.
The direct and indirect costs include the following:
Direct materials consumed in the growing process such as soil, chemicals, fertilizers and other supplies
Direct labour for individuals who work in the cultivation department
Indirect labour for other personnels time spent related to the cultivation process
Indirect materials consumed related to the cultivation process
Utility related to the cultivation process
Depreciation and maintenance of production equipment
Quality assurance on the plants
Unrealized gains or losses arising from the changes in fair value during the period are included as a separate line in the gross profit calculation on the consolidated statements of loss and comprehensive loss.
The description of the entity's accounting policy for biological assets. [Refer: Biological assets]
Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef