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IPSAS Explained: A Summary of International Public Sector Accounting Standards, 2nd Edition by Thomas Muller-Marques Berger

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IPSAS 16: Investment Property

Objective

The objective of IPSAS 16 is to prescribe the accounting treatment for investment property and related disclosure requirements.

The IFRS on which the IPSAS is based

IAS 40, Investment Property

Content

Principal definitions

Investment property is property (land or a building - or part of a building - or both) held to earn rentals or for capital appreciation or both, rather than for:

rtrif Use in the production or supply of goods or services or for administrative purposes
rtrif Sale in the ordinary course of operations

General remarks

Investment property generates cash flows largely independently of the other assets held by an entity, distinguishing it from other land or buildings controlled by public sector entities, including owner-occupied property.

There are a number of circumstances in which public sector entities may hold property to earn rental and for capital appreciation. For example, a public sector entity (other than a GBE) may be established to manage a government's property portfolio on a commercial basis.

Scope

IPSAS 16 does not apply to

a) Biological assets related to agricultural activity (see IPSAS 27, Agriculture); and
b) Mineral rights and mineral reserves such as oil, natural gas, and similar non-regenerative resources.

Recognition ...

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