Difference between revisions of "IAS40"

Latest revision as of 14:37, 20 August 2020

Investment property is land or a building (including part of a building) or both that is:

• Held to earn rentals or for capital appreciation or both;
• Not owner-occupied;
• Not used in production or supply of goods and services, or for administration; and
• Not held for sale in the ordinary course of business.

Investment property may include investment property that is being redeveloped.

An investment property is measured initially at cost. The cost of an investment property interest held under a lease is measured in accordance with IAS 17 Leases* at the lower of the fair value of the property interest and the present value of the minimum lease payments.

For subsequent measurement an entity must adopt either the fair value model or the cost model as its accounting policy for all investment properties. All entities must determine fair value for measurement (if the entity uses the fair value model) or disclosure (if it uses the cost model). Fair value reflects market conditions at the end of the reporting period.

• Under the fair value model, investment property is remeasured at the end of each reporting period. Changes in fair value are recognized in profit or loss as they occur. Fair value is the price at which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction, without deducting transaction costs (see IFRS 13 Fair Value Measurement).
• Under the cost model, investment property is measured at cost less accumulated depreciation and any accumulated impairment losses. Fair value is disclosed.

Gains and losses on disposal are recognized in profit or loss.

IAS 40 Investment Property is Copyright: IFRS Foundation