Implies that the person making the statement has directed certain doom of one sort or another on the person to whom the statement is directed. When the shorthand is used, it simply means that the person is doomed, has made an unrecoverable critical error or has otherwise made a mistake that puts ones own life, freedom or choices at some degree of peril, which is not necessarily always or even most times fatal. When the full statement is used from one person to another, it also means that the person making the statement believes with a high degree of confidence that s/he has total control or domination over the person to whom the statement was directed. Examples of this in society and popular culture include authority figures such as parents, military officers, etc.
The notion that "ass is grass" has anything to do with post-death bodily decay and/or fertilizer is a misdirected urban legend by pompous buffoons trying to impress someone with a creative but ultimately false etymology.
Child to friend: "Oh man. I got three Fs on my report card. When my dad hears about this, my ass is grass."
Child to friend: "My parents said I'd be grounded if I didn't bring my math grade up from a C to a B."
Friend: "What'd you get?"
Child, pausing: "An F."
Friend: "Sounds like your ass is grass."
Husband to wife's lover, while picking up bludgeoning weapon, after finding wife and the other man in bed: "Your ass is grass and I'm the lawnmower."
Kid playing video game who just lost his last 'life point'. "Aw, my ass is grass."
Military drill sergeant to troops: "Move scumbags! Move, move MOVE! Didn't you hear me, Jones? I said move, and when I say move, you move, and you move NOW or your ass is grass, and I'm the lawnmower, do you understand that Jones?"
Jones, ideally while MOVING NOW: "Sir, yes, sir!"
Driver seeing sirens in the rear mirror, muttering to self. "My ass is grass."
When Chris (River Phoenix) and his 3 friends find the lost dead body of a 12 year old boy, he stands up for the body against the local bad-asses. Including his older brother.
"Ass is Grass" is said while they are all in the woods fighting for whose gang gets to claim they found the body.
Teddy: Oh yeah, Vern told us how you found him. (mocking tone) 'Oh Billy! I think I just turned my Fruit-Of-The-looms into a fudge Factory!"
Charlie: Thats it! Your ass is grass!