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    Investment Property

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    topnotcher2011
    IAS/PAS 40 provides guidance on accounting for investment property, which is defined as land or buildings held to earn rentals or for capital appreciation rather than for use in production. Investment property can be measured using either the cost model or fair value model. Under the cost model, investment property is measured at cost less accumulated depreciation and impairment losses. Under the fair value model, investment property is measured at fair value with changes in fair value recognized in profit or loss. Gains or losses on disposal of investment property are also recognized in profit or loss.

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    Investment Property

    Uploaded by

    topnotcher2011
    1K views2 pages
    IAS/PAS 40 provides guidance on accounting for investment property, which is defined as land or buildings held to earn rentals or for capital appreciation rather than for use in production. Investment property can be measured using either the cost model or fair value model. Under the cost model, investment property is measured at cost less accumulated depreciation and impairment losses. Under the fair value model, investment property is measured at fair value with changes in fair value recognized in profit or loss. Gains or losses on disposal of investment property are also recognized in profit or loss.

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    IAS/PAS 40 provides guidance on accounting for investment property, which is defined as land or buildings held to earn rentals or for capital appreciation rather than for use in production. Investment property can be measured using either the cost model or fair value model. Under the cost model, investment property is measured at cost less accumulated depreciation and impairment losses. Under the fair value model, investment property is measured at fair value with changes in fair value recognized in profit or loss. Gains or losses on disposal of investment property are also recognized in profit or loss.

    Copyright:

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    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    1K views2 pages

    Investment Property

    Uploaded by

    topnotcher2011
    IAS/PAS 40 provides guidance on accounting for investment property, which is defined as land or buildings held to earn rentals or for capital appreciation rather than for use in production. Investment property can be measured using either the cost model or fair value model. Under the cost model, investment property is measured at cost less accumulated depreciation and impairment losses. Under the fair value model, investment property is measured at fair value with changes in fair value recognized in profit or loss. Gains or losses on disposal of investment property are also recognized in profit or loss.

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    IAS/PAS 40 INVESTMENT PROPERTY

    Land or building, or both held by the OWNER or LESSEE under FINANCE LEASE to earn RENTALS
    or CAPITAL APPRECIATION. E.g. Long term capital Appreciation, Currently undetermined use, held by
    an entity under finance lease, then, leased out under operating lease (sublease), leased out under
    operating lease

    Owner With Rental Owner With


    IAS/PAS 16 (SIGNIFICANT portion)
    occupied (PPE, Income occupie Rental
    PAS 16) (PAS40) d Income
    **IAS/PAS 40 (OWNER OCCUPIED INSIGNIFICANT)

    I. INITIAL RECOGNITION @ COST

    II. SUBSEQUENT MEASUREMENT

    • PPE measurement per CLASS. In Investment Property all are measured using one model
    only except if using Fair Value and it cannot be reliably determined in a continuing basis.

    A. COST MODEL

    = Cost- Accumulated Depreciation-Accumulated Impairment

    • Fair Value of the asset is DISCLOSED

    B. FAIR VALUE MODEL (encouraged by PAS)

    • Reported every B/S @ Fair Value

    • GAIN/LOSS recognized in PROFIT/LOSS

    • TRANSACTION COSTS and OTHER DISPOSAL COST are NOT DEDUCTED.

    • NO depreciation EXCEPT if the FAIR VALUE CANNOT BE RELIABLY determined on a


    CONTINUING BASIS / on an ONGOING BASIS, the entity shall measure that investment
    property using COST MODEL. REMAINING Investment property shall be measured
    using the FAIR VALUE.

    • REQUIRED when an entity chooses to classify property held by a LESSEE under


    OPERATING LEASE as an investment property.

    III. TRANSFERS TO AND FROM OTHER CLASSIFICATIONS

    A. COST MODEL

    • NO change in carrying amount. Therefore, no gain or loss.

    B. FAIR VALUE MODEL

    • Change in Fair Value taken to PROFIT/LOSS except if from OWNER OCCUPIED.

    • Reclassification from OWNER OCCUPIED to Investment Property @ FV:

    - FV > CV

    Land Held as Investment Property xx


    Land xx
    Revaluation Surplus xx
    - FV < CV
    Land Held as Investment Property xx
    Revaluation Surplus (Equity)/ Revaluation Surplus( P/L) xx

    Land xx

    • Any further excess is charged to a LOSS taken to PROFIT/ LOSS.

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