IAS 40 Investment Properties

Question 1

What does the accounting for properties depend on?

Answer 1

The intended use

Question 2

What are investment properties?

Answer 2

Properties held to earn rentals and/or for capital appreciation.

Question 3

What happens with Dual use properties?

Answer 3

Dual use properties shall be split and accounted for separately is the portions could be sold or leased out separately.

Question 4

Which subsequent Measurement methods are there for IAS 40?

Answer 4

Fair value or cost model

Question 5

If fair value is chosen, what is required?

Answer 5

The Fair Value model requires yearly revaluations at fair value, with any change recorded in profit or loss.

Question 6

How are investment properties valued under the cost model?

Answer 6

Under the cost model properties are valued at amortized cost - any accumulated impairment losses.

Application of cost model requires disclosure of fair value in the notes.