IAS 40 Investment Properties

Question 1

Definition of investment property

Answer 1

1. Use to earn rentals
2. For capital appreciaton
   x Owner occupied property IAS 16 PPE
   x Property held for sale in the normal course of business IAS 2 Inventories
   x Property being constructed for third parties IFRS 15
   x Property leased to another entity under a finance lease IFRS 16

Question 2

Ancillary Services

Answer 2

• If the entity provides ancillary services to the tenants, it is Investment property if the services are insignificant such as providing security and maintenance services

Question 3

Measurement basis

Answer 3

IAS 40 Investment property states that under fair value model, Investment property must be either measured at cost or fair value model. FV model shall be measured at each reporting date.

Gain or losses shall be immediately be recognized to profit or loss