Short answer
SKK 13 brings together two topics that do not appear to be related. Biological assets, that is, living animals and plants, and concession agreements. For the former, the main rule is the choice between fair value and cost for each class. For the latter, the only question is whether the operator acquires a financial asset or an intangible asset.
| Current version | SKK 13 (2023), for periods beginning on or after January 1, 2025 |
| Biological activity | A live animal or a plant, paragraph 5 |
| Two measurement models | Fair value or cost, chosen for each class, paragraph 6 |
| When fair value is used | When it can be determined immediately, at no cost or undue effort. |
| Where do the changes go? | Income or loss for the period, paragraph 9 |
| Harvested production | Fair value minus harvesting selling costs, then inventory, paragraph 10. |
| Agricultural land | Outside this standard, paragraph 4 |
| Concessions | Financial asset or intangible asset, paragraph 21 |
Verified on November 8, 2026 by Andi Haxhillari, Certified Accountant. Compared with IFRS 13 (2023), paragraphs 1 to 31, the version effective January 1, 2025, and with the November 2015 version attached below.
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The applicable version is SRC 13, updated in 2023. It applies to accounting periods beginning on or after January 1, 2025, on a prospective basis. This is specified in paragraph 30. The standard comprises a total of 31 paragraphs.
Paragraph 4 provides two areas: all biological assets and concession agreements.
Land used for agricultural activities remains excluded. It is treated as tangible long-term assets under IFRS 5.
The standard is comparable to Section 34 of the International Financial Reporting Standard for Small and Medium-sized Entities, published in July 2015.
Paragraph 5 is short and clear. A biological asset is a living animal or plant. Agricultural produce is the output obtained from the unit's biological assets.
Agricultural activity is the unit's management of the biological transformation of biological assets. And biological transformation consists of the processes of growth, conversion, production, and breeding that bring about changes in quality and quantity.
So the cow is a biological organism, and milk is an agricultural product. The apple on the tree is part of the tree; the picked apple is an agricultural product.
Paragraph 6 requires that the policy be selected for each class of biological assets, not once for the entire farm.
The fair value model is used when fair value is determined immediately, without undue cost or effort. The cost model is used for all other assets.
In practice, this means that for livestock with an active market and published prices, fair value is attainable, whereas for a growing orchard it often is not, and then cost remains.
Paragraph 9 requires measurement at fair value less costs of sale, and changes are recognized in the period's profit or loss.
Paragraph 11 sets out the hierarchy of sources. First, the price of an active market. Then the most recent transaction. Next, the prices of similar assets or sector references. And only at the end, the present value of expected cash flows.
Paragraph 13 requires measurement at cost less depreciation and accumulated impairment losses.
Paragraph 15 requires an impairment test at each reporting date. Paragraph 16 allows you to do it on an item-by-item basis or for groups of similar items when that is not practical, taking into account costs to complete and sell. Paragraph 17 allows reversal when the conditions no longer exist.
This is the rule that applies regardless of the model chosen, and therefore it's worth remembering.
Harvested agricultural production is measured at fair value less costs of sale at the time of harvest. This amount becomes its cost for the purposes of IFRS 4 Inventories. This is stated in paragraph 10 for the fair value model and paragraph 14 for the cost model.
So even a farm that keeps its cows at cost measures the milk at its fair value at the moment of milking. From that moment on, that milk is inventory at that cost.
Paragraph 8 adds a threshold. Unharvested or uncut produce is not recognized as a separate asset. It is part of the biological asset.
Paragraph 20 describes the scheme. The government or another public authority, i.e., the concessionaire, contracts a private operator to build or improve an infrastructure, which the operator uses and maintains for a period.
The concessionaire remains the one who controls which services are offered, to whom they are offered, at what price, and retains a significant residual interest.
Paragraph 21 provides the two categories, and the entire treatment depends on this choice.
It is used when the operator has an unconditional contractual right to determinable cash flows, that is, when it is paid by the concessionaire regardless of use. Recognition is at fair value, and then IFRS 3 is applied, according to paragraph 22.
It is used when the operator has the right to charge users, that is, when revenues depend on how many people use it. Recognition is made at fair value, and then IFRS 5 is applied, according to paragraph 23.
Paragraph 21 also allows for a mixed arrangement. A single contract may include both in different parts, for example a guaranteed minimum payment plus a fee.
The operator's service revenues are recognized under Topic 8, and presented under Topic 2.
SKK 13 does not contain any numerical examples. The following example was constructed by us using rounded figures.
A livestock farm has 40 cows. As of December 31, 2025, the fair value less selling costs is 180,000 lek per head, or 7,200,000 lek in total.
During the year 2026, two calves are born and prices rise. On December 31, 2026, the farm has 42 head, with fair value less selling costs of 195,000 lek per head, i.e., 8,190,000 lek.
The difference is 990,000 lek, and all of it is recognized in the 2026 income, according to paragraph 9. It does not await the sale of any cow.
During the same year, 60,000 liters of milk are milked. At the time of milking, the fair value less selling expenses is 70 lek per liter, i.e., 4,200,000 lek. This amount is recognized as revenue and simultaneously recorded as the cost of that milk as inventory, according to paragraph 10.
If the farm had chosen the cost model for livestock, the headcount would have been carried at cost minus depreciation and amortization, and the 990,000 lek increase would not have been recognized at all. But the milk would be measured the same, at 4,200,000 lek, because paragraph 14 requires this even under the cost model.
Paragraph 26 requires, for fair value–measured assets, a description of the classes, the methods and assumptions used, and a reconciliation of changes between the beginning and end of the period, with impairments from harvesting shown separately.
Paragraph 27 requires, for assets measured at cost, a description of the classes, the reason why fair value is not measured reliably, the method and useful lives for depreciation, and the gross amount with accumulated depreciation.
Paragraphs 28 and 29 refer for concessions to the explanations required by IFRS 3 and IFRS 8 for the financial-asset model, and by IFRS 5 and IFRS 8 for the non-current-asset model.
The first mistake is recognizing unharvested production as a separate asset. Paragraph 8 prohibits it. It is part of the biological asset until it is harvested.
The second mistake is measuring harvested production at production cost. The standard requires fair value less costs of sale at the time of harvest, and this applies under both models.
The third mistake is including agricultural land within this standard. Paragraph 4 excludes it, and it goes to SKK 5.
The fourth mistake is choosing a single model for the entire farm. Paragraph 6 requires a choice for each class of biological assets.
The fifth mistake in concessions is treating infrastructure as the operator's ordinary asset. It is not his. He has either a right to collect payments or a right to charge fees.
Only if you have chosen the fair value model for that class. If you apply the cost model, it is not revalued, but a impairment test is performed at each reporting date.
Fair value less costs of sale at the time of harvest, and this becomes its cost as inventory. The rule applies under both models.
No. Paragraph 4 excludes it. Agricultural land is treated as a tangible long-term asset under IFRS 5.
No. There is no paragraph on government grants for biological assets. This is a departure from Section 34 of the International Standard, where they are explicitly addressed. For grants, see IFRS 10.
Ask who pays. If the concessionaire pays with determinable and unconditional amounts, it is a financial asset. If users pay by fee, it is a non-financial asset. A contract can have both in different parts.
No. Paragraph 30 requires prospective application.
The content of this page is based on reading the 2023 version on the National Council of Accountancy's website. The paragraphs are summarized in our own words; they are not verbatim quotes.
The wording of paragraph 6 regarding small business entities wasn't clear to us on reading. The operational understanding that emerges is that they end up under the cost model, but if this point is critical for you, read paragraph 6 in the official text before finalizing your accounting policy.
Similarly, the wording of paragraph 4 regarding agricultural lands contains a grammatical ambiguity in the original. The context makes it clear that agricultural lands are excluded from this standard.
SIC 13 “Biological Assets and Concession Agreements,” updated in 2023, paragraphs 1 through 31. Effective date January 1, 2025, with prospective application according to paragraph 30.
The standard refers to the “accounting law” without citing its number. The law in force is Law No. 25/2018 “On Accounting and Financial Statements,” as amended by Law No. 87/2026.
Links to other standards. Inventories in IFRS 4. Land and intangible assets in IFRS 5. Financial instruments in IFRS 3. Revenue in IFRS 8. Government grants in IFRS 10. Materiality in paragraphs 64 to 68 of IFRS 1.
The following files are the November 2015 version and the accompanying materials in our library. The text applicable today is the updated 2023 version with 31 paragraphs.
Source of the official text: National Council of Accountancy, standards effective January 1, 2025.