Yakub02
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An investment property is property (land or a building, part of a building or both) held to earn rentals or for capital appreciation or both.
Accounting treatment The recognition criteria for investment property are the same as for property, plant and equipment under IAS 16. An investment property should be recognised as an asset only when:
it is probable that future economic benefits associated with the property will flow to the entity; and
the cost of the property can be measured reliably. Measurement at recognition Investment property should be measured initially at cost plus the transaction costs incurred to acquire the property.
A property held under a lease may be classified as an investment property.
The initial cost of such a property is found by capitalising the lease in accordance with IFRS 16: Leases.
Measurement after recognition After initial recognition an entity may choose as its accounting policy:
the fair value model; or
the cost model. The chosen policy must be applied to all the investment property of the entity.
Once a policy has been chosen it cannot be changed unless the change will result in a more appropriate presentation. IAS 40 states that a change from the fair value model to the cost model is unlikely to result in a more appropriate presentation.
Accounting treatment The recognition criteria for investment property are the same as for property, plant and equipment under IAS 16. An investment property should be recognised as an asset only when:
it is probable that future economic benefits associated with the property will flow to the entity; and
the cost of the property can be measured reliably. Measurement at recognition Investment property should be measured initially at cost plus the transaction costs incurred to acquire the property.
A property held under a lease may be classified as an investment property.
The initial cost of such a property is found by capitalising the lease in accordance with IFRS 16: Leases.
Measurement after recognition After initial recognition an entity may choose as its accounting policy:
the fair value model; or
the cost model. The chosen policy must be applied to all the investment property of the entity.
Once a policy has been chosen it cannot be changed unless the change will result in a more appropriate presentation. IAS 40 states that a change from the fair value model to the cost model is unlikely to result in a more appropriate presentation.