IAS 40 Flashcards
What happens if fair value model is applied? (Gain or loss)
Gain or loss is reported in profit or loss. Unlike IAS 16 where revaluation surplus is utilised
Is investment property depreciated under fair value model?
No
What does the cost include in initial measurement?
Purchase price + directly attributable expenditure
What is carrying amount?
Amount at which an asset is recognised in SOFP
What is fair value?
The estimated price at which an asset is bought or sold when both the buyer and seller freely agree on a price
What is owner-occupied property?
Property held by owner for use in production/supply of goods/administration
What is investment property?
Property or land held to earn rentals or/and capital appreication
Operating lease, does not include finance lease
Who can hold investment property?
By the owner or by the lessee as a right-of-use asset
What should initial measurement costs not include?
Start-up costs
Abnormal waste
Initial operating losses before property achieves planned occupancy
How is investment property remeasured?
At fair value
How is investment property initially measured?
At cost
Gains or losses arising from changes in the fair value of investment property inclusion?
Net profit or loss for the period
Fair value can’t be measured reliably but can now be measured reliably for property under construction?
Measures that investment property under construction at cost until fair value becomes determinable or construction is completed
Fair value can never be reliably determined?
Measure that investment property using the cost model in IAS 16
Where a property has previously been measured at fair value?
ContinueC to be measured at fair value until disposal
