09 IFRS Investment Property

Question 1

What are the characteristics of investment property under International Financial Reporting Standards (IFRS)?

Answer 1

1 Investment property consists of building and/or land; 2 Held by the owner or a lessee under a capital lease; 3 For the purpose of earning rental income, recognizing capital appreciation, or both.

Question 2

If an owner uses part of property, under what conditions may the other part be accounted for as investment property?

Answer 2

If the part of the property used by the owner and the part not used by the owner can be sold or leased separately and if the part not used otherwise meets the definition of investment property, it can be treated as investment property.

Question 3

What are the acceptable methods (models) for measuring and reporting investment property?

Answer 3

The cost method (model) and the fair value method (model). An entity may use only one of these methods to measure and report all of its investment property.

Question 4

Under what conditions can property already held be transferred into or out of the investment property category?

Answer 4

Transfers of property into or out of the investment property category can be made only when it is clearly evident that there has been a change in the use of the property.