Investment Property

Question 1

Which statement best describes investment property?

a. Property held for sale in the ordinary course of business
b. Property held for use in the production and supply of goods or services and property held for administrative
purposes
c. Property held to earn rentals or for capital appreciation
d. Property classified as held for sale

Answer 1

c. Property held to earn rentals or for capital appreciation

Question 2

Which of the following statements best describes owner-occupied property?

a. Property held for sale in the ordinary course of business
b. Property held for use in the production and supply of goods or service and property held for administrative purposes
c. Property held to earn rentals
d. Property held for capital appreciation

Answer 2

b. Property held for use in the production and supply of goods or service and property held for administrative purposes

Question 3

Investment property includes all of the following, except

a. Land held for long-term capital appreciation
b. Land held for currently undetermined use
c. Building owned by the reporting entity leased out under an operating lease.
d. Property held for sale in the ordinary course of business.

Answer 3

d. Property held for sale in the ordinary course of business.

Question 4

Which of the following is an investment property?

a. Property being constructed or developed on behalf of third party
b. Property being constructed and developed as investment property
C. Property held for future development and subsequent use as owner-occupied property
d. Owner-occupied property awaiting disposal

Answer 4

b. Property being constructed and developed as investment property

Question 5

Subsequent to initial recognition, the investment property shall be measured using

a. Fair value model or revaluation model
b. Fair value through profit or loss model
C. Cost model or fair value model
d. Cost model or revaluation model

Answer 5

C. Cost model or fair value model

Question 6

If an entity owns and manages a hotel and services provided to guests are a significant component of the arrangement as a whole, the hotel is classified as

a. Investment property
b. Owner-occupied property
c. Partly investment property and partly owner-occupied
d. Neither Investment property nor owner-occupied property

Answer 6

b. Owner-occupied property

Question 7

Which statement is true concerning property leased to an affiliate?

l. From the perspective of the individual entity that owns it, the property leased to an affiliate is considered an
investment property.
II. From the perspective of the affiliates as a group and for purposes of consolidated financial statements, the property is treated as owner-occupied property.

a. Both I and II
b. Neither I nor II
C. I only
d. II only

Answer 7

d. II only

Question 8

Which disclosure shall be made when the fair value model has been adopted?

a. Depreciation method used
b. The amount of impairment loss recognized
c. Useful life
d. Net gain or loss from fair value adjustments

Answer 8

d. Net gain or loss from fair value adjustments

Question 9

Transfers from investment property to property, plant and equipment are appropriate

a. When there is change of use.
b. Based on the discretion of management.
c. Only when the entity adopts the fair value model.
d. The entity can never transfer property into another classification once it is classified as investment property.

Answer 9

a. When there is change of use.

Question 10

An investment property is derecognized when

a. It is disposed to a third party.
b. It is permanently withdrawn from use.
C. No future benefits are expected from the disposal.
d. In all of these cases.

Answer 10

d. In all of these cases.