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IAS 40-Investment Property

Objective

The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

Scope

This Standard shall be applied in the recognition, measurement and disclosure of investment property.

Definitions

Carrying amount is the amount at which an asset is recognised in the statement of financial position.

Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other IFRSs, eg IFRS 2 Share-based Payment.

Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other IFRSs, eg IFRS 2 Share-based Payment.

Investment property is property (land or a buildingβ€”or part of a buildingβ€” or both) held (by the owner or by the lessee as a right-of-use asset) to earn rentals or for capital appreciation or both, rather than for:

  • use in the production or supply of goods or services or for administrative purposes; or
  • sale in the ordinary course of business.

Owner-occupied property is property held (by the owner or by the lessee as a right-of-use asset) for use in the production or supply of goods or services or for administrative purposes.

Recognition

An owned investment property shall be recognised as an asset when, and only when:

  • it is probable that the future economic benefits that are associated with the investment property will flow to the entity; and
  • the cost of the investment property can be measured reliably

Measurement

An owned investment property shall be measured initially at its cost. Transaction costs shall be included in the initial measurement.

With the exception noted in paragraph 32A, an entity shall choose as its accounting policy either the fair value model in paragraphs 33–55 or the cost model in paragraph 56 and shall apply that policy to all of its investment property

Disclosure

The disclosures below apply in addition to those in IFRS 16. In accordance with IFRS 16, the owner of an investment property provides lessors’ disclosures about leases into which it has entered. A lessee that holds an investment property as a right-of-use asset provides lessees’ disclosures as required by IFRS 16 and lessors’ disclosures as required by IFRS 16 for any operating leases into which it has entered.

An entity shall disclose:

  1. whether it applies the fair value model or the cost model.
  2. [deleted]
  3. when classification is difficult (see paragraph 14), the criteria it uses to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course of business.
  4. [deleted]
  5. the extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued. If there has been no such valuation, that fact shall be disclosed.
  6. the amounts recognised in profit or loss for:
  • rental income from investment property;
  • direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period;
  • direct operating expenses (including repairs and maintenance) arising from investment property that did not generate rental income during the period; and
  • the cumulative change in fair value recognised in profit or loss on a sale of investment property from a pool of assets in which the cost model is used into a pool in which the fair value model is used (see paragraph 32C).

7. the existence and amounts of restrictions on the realisability of investment property or the remittance of income and proceeds of disposal.

8. contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements.